An agreement should be announced today on how state leaders will take care of a nearly $500 million deficit at the end of this fiscal year.
The agreement, which will show much of the state’s savings account will be tapped to balance this fiscal year’s budget, apparently was ready to roll out Wednesday, but legislative leaders were unable to show it first to all lawmakers.
A couple interesting things to note in the agreement will be how much of the state’s Rainy Day Fund was used for this fiscal year, which ends June 30. The fund, filled to capacity that past couple years, has nearly $600 million.
Gov. Brad Henry has pushed for using about $485 million to take care of this fiscal year’s shortfall. He proposed in his executive budget released to lawmakers earlier this month using $69 million for the 2011 fiscal year. Legislators will have about $1.2 billion less to spend this session compared with last year. That would leave about $43 million.
Republican legislative leaders want to no more than about $230 million of the Rainy Day Fund to close out this fiscal year. They want to leave the remainder for the 2011 fiscal year and have about $150 million left after developing the 2011 fiscal year budget.
Leaders want to use more of the $700 million in federal stimulus funds the state has on the 2010 fiscal year budget. The governor is concerned using the federal stimulus funds first before drawing down most of the state’s savings account and leaving a sizeable chunk in the savings account could give the impression the state used the federal money to replenish its savings account. That’s a major no-no, according to the federal government as part of its agreement with the state.
Another interesting point will be to see what agencies get emergency, or supplemental, funds to help them get through this fiscal year.
The governor in his budget targeted public schools, the state’s health care agency, prisons and the Rehabilitation Services Department to receive supplemental funds to make up for monthly across-the-board cuts and to partially restore lost revenues. The governor in his budget proposed about $101 million in supplemental funds – with about $61 million of that coming from the Rainy Day Fund – to make up for revenues coming in about 25 percent below estimates so far this fiscal year.
Legislative leaders have been trying to get about $3 million in supplemental funds for the Public Safety Department, which has announced state troopers will have to take furlough days beginning in March to make up for its budget cuts.
A House Democratic member says the agreement doesn’t include funding to restore about $7 million in cuts to senior nutrition programs that the Department of Human Services made last year.
A budget agreement to balance the 2010 fiscal year budget was announced last month, but details of how much money would come from federal stimulus funds and from the Rainy Day Fund still were being hashed out until this week.
Legislative leaders and Henry agree a 2010 fiscal year budget must be approved before work starts on a 2011 fiscal year budget.
Revised state Tax Commission estimates — mostly on the strength of increased energy prices — resulted in an increase in state revenue for both the remainder of the 2010 fiscal year and for the upcoming 2011 fiscal year.
The state has an additional $61 million for the rest of this fiscal year. Taking into account the average 7.5 percent across-the-board cuts implemented to state agencies since August, the state’s actual budget hole at the end of the fiscal year is expected to be about $470 million.
The House General Conference Committee on Appropriations will meet for the first time today to take up appropriation bills for the 2010 fiscal year. The Senate approved the bills, which contained no figures, earlier this week. The House on Wednesday rejected some procedural changes the Senate made to the bills and referred them to the House GCCA.
Figures likely will be inserted in the bills for committee members to consider. Approval would send the bills on to the House. If the House approves them, they will be sent back to the Senate, which either can approve or reject them. If approved by the Senate, the bills would then go to the governor, who could receive them, if no snags develop, by the end of next week.
- Michael McNutt, Capitol Bureau