Based on the details of the House budget released today hopes of a grand budget compromise being within reached are quickly evaporating.
Here is a quick cheat sheet on the last two budget proposals:
- House 4/4 budget: Spending – $31.102 billion; Ending fund balance – $70 million; Total Reserves – $336 million (or 1% of spending)
- Senate 3/15 budget: Spending – $30.713 billion; Ending fund balance – $172 million; Total Reserves – $437 million (or 1.4% of spending)
The major difference between the Senate reserves and the House reserves is the House proposals relies on $238 million of a new “working capital reserve” that assumes local sales tax revenue stays in the state general fund until dispersed to the local governments the tax is owed to.
This means that without this new accounting change the House ending fund balance would be a negative $168 million.
Which leads to the question how can the state spend money owed to local governments?
Perhaps the answer to that question will be forth coming at 1 p.m. today when the House Ways and Means Committee holds a public hearing on HB 2822 which makes this accounting change. Unfortunately the fiscal note for HB 2822 is not currently available.
If after making this accounting change (monthly transfer instead of daily) there truly is $238 million in extra local tax revenue that is available for state spending that money should be returned to local governments as a one-time windfall since it is local tax revenue instead of being booked for the state’s reserves.
If that can’t occur one has to wonder whether the money is truly available for state spending in the first place.
[Reprinted from the Washington Policy Center blog]