Monday, June 6, 2011

From The House

We had almost 350 constituent contacts this last week, which was a little unexpected given the holidays. Many of these calls and emails were about the budget process, which is in the reconciliation phase with the Senate. A fair number, however, were concerning my traditional Memorial Day column — for which I’m grateful.

You may remember that we completed budget work on the House side and sent it on to the Senate in March. While this document was the product of much hard work, it was also based on revenue assumptions that have since been modified (for the better) and did not include some of the bills that have subsequently become law and need funding.

One of the ways we prepare for the ultimate conference committee negotiation with our Senate colleagues is to prepare amendments to our original budget that reflect the revenue changes, the new legislation and our House Ways and Means vision of how we should spend the people’s money. Amendment 1-A was offered by our chairman, Dan Cooper, in the Appropriations Bill, and it amended back to the version we passed in March.

The most significant change in the original budget was the addition of $210 million that has become available since March. We immediately replaced $97 million of nonrecurring funds with $105 million of recurring funds in the Education Finance Act (EFA). We always try to use recurring dollars whenever possible to avoid the scramble during the next funding cycle to find funds that may have been nonrecurring and not recurred, such as temporary federal grants or temporarily diverted trust account funds. My thinking on using one-time money for ongoing needs is well known, but I will elaborate in a future column.

The changes to the EFA funding had the beneficial effect of raising the anticipated per-student base cost to $1,876, which is an $88 improvement over the original budget.

We also directed $146 million into nonrecurring funds to begin to pay off the unemployment insurance loan to the federal government. This is, of course, the proper thing to do. However, it runs me hot that we borrow from the feds at a higher rate to take care of our unemployed workers than is charged the banks on the discount rate. It is federalism, but not a particularly cooperative version, in my view.

In addition, we clarified the language relating to the prohibition of lobbyists being paid with general fund dollars. The budget amendment also increases state contribution to libraries, as well as funds the Illegal Immigration Bill and the Voter ID Bill and continues implementation of the statewide accounting system. Additional funding also puts us on a trajectory to build the 5 percent General Reserve Fund mandated by the voters in November 2010. This should happen five years ahead of schedule.

This last feature was something that I worked hard on as we are increasing our “rainy day” fund at the end of a serious financial downturn. This gives me cause to think my colleagues in the House are beginning to think more concretely about the financial reforms I have been pushing for years. We’ll see.

Amendment 1-A is essentially our best, most prudent position in the upcoming conference committee negotiations with the Senate. It is a sound, forward-looking document that reflects well on the House of Representatives.