Senate Finance Budget: What to Keep an Eye On


Budget debate will begin on the Senate floor today. The budget was passed out of committee May 3, and made publicly available May 8. The usual practice in the legislature allows members to have the budget for one week (three legislative days) for review. However, a vote last Thursday moved the debate up to today.

State law requires the House and Senate to sit jointly in open sessions to consider the Governor’s executive budget, but that has never happened. Had lawmakers followed state law, the House and Senate would have begun joint open hearings 125 days ago. Now, with just 3 ½ weeks remaining in the legislative session, there is a rush to get the bill passed by the Senate and back to the House.

Unsurprisingly, the proposed budget is absurdly large – over $24.2 billion when federal food stamp money (which both the House and Senate has omitted from the budget for the first time this year) is included. While the Senate Finance budget isn’t much bigger than the budget passed by the House, there are some significant differences; such as the already publicized one percent state employee pay increase worth $15.8 million and the $26.1 million statewide 4K program (which we have discussed here). Below are some of the other significant changes from the passed House budget, including section 1A, 1B provisos, and the Capital Reserve Fund.

Obamacare Light Proviso Expanded

The most current version of the budget also increases the costs of the hypocritical Obamacare Light Medicaid expansion alternative introduced by House republicans through proviso earlier this year. The Senate Finance Committee provision increases funding for federally qualified health clinics by $2 million, and increases the amount of funds available for the community residential care optional state supplement by $3 million. The Finance Committee also inserted a $2 million appropriation for free clinics. The proviso expanding state medical spending has grown since its insertion in the House, and with powerful interests in favor of further expansion of Medicaid spending, there’s every reason to expect further growth.

The Recurring “Non-Recurring” Deal Closing Funds 

Last year, the House and Senate attempted to increase the Department of Commerce Deal Closing Fund – a fund administered by the executive branch and used for economic development deals – by $15 million to a total of $25 million. Of those funds, $10 million would have been taken from the Mortgage Settlement Fund. While the governor successfully vetoed this $10 million last year, the proposal senators will consider today appropriates $25 million ($13.7 million in nonrecurring funds, $3.5 million from the Capital Reserve Fund, and $8 million in recurring money) to the fund. Not only does the Deal Closing Fund fall far outside the realm of a core government service, this budget proposal is a prime example of how one-time appropriations to state agencies become promises of recurring funds in the future.

Budget and Control Board Power Grab?

One Senate Finance proviso would have the Budget and Control Board (BCB) study the feasibility of assuming certain functions of state agencies that receive less than $5 million in appropriations in the current fiscal year. While the functions that would be considered include mostly administrative duties, there is no reason to believe that this unaccountable legislative-executive hybrid board would be any better at performing these duties more efficiently.

Another proviso deleted by the Senate Finance Committee (chaired by Hugh Leatherman, a member of the BCB) would have prohibited the BCB from pledging, borrowing, or transferring funds from the Insurance Reserve Fund for purposes other than those authorized by law.

Returning Non-Recurring Money to General Fund

We’ve recently argued for the elimination of Part 1B of the budget, the section of the budget used to direct money to agencies for special programs or pet projects through proviso. While the Senate Finance Committee certainly didn’t propose its elimination, their section 1B returns $34.6 million of the $159.8 million of non-recurring funds back to the General Fund. What they intend to do with it is unclear, but any tax revenue beyond what is necessary for core services should be returned to the taxpayers.

More Money for the State Farmers Market

The Finance Committee has more than tripled the Capital Reserve Fund Appropriation for the State Farmers Market from $3 million to $9.8 million, presumably for more land acquisition (an interest that has come under scrutiny for conflict of interest concerns in the past). Further, the Finance Committee seems intent on preventing any potential savings on funds previously appropriated for property acquisition by the State Farmers Market. The House version of the budget would have required remaining funds after the initial purchase to be remitted to the state General Fund, but the Senate Finance budget requires these funds be used for costs related to the acquisition of additional properties by the State Farmers Market.

The Senate is expected to complete deliberations on these and many other provisions of the $24.2 billion budget bill by the end of the week.

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