March 26, 2021
The House Appropriations Committee chair has proposed an operating budget that is broadly similar to the Senate Ways & Means Committee chair’s proposal. Both would impose a capital gains tax and drain the rainy day fund (the budget stabilization account, or BSA). Both would balance over four years, leaving unrestricted ending balances of $199 million in the House and $179 million in the Senate.
The Senate chair’s version is the high-water mark for spending, though. The House chair’s proposal would increase appropriations from funds subject to the outlook (NGFO) by $1.293 billion less (over three years) than the Senate chair would.
For the 2021 supplemental, the House chair would reduce 2019–21 NGFO appropriations by 2.6%, to $52.313 billion. (This would still be an increase of 17.1% over 2017–19.) For 2021–23, the House chair would appropriate $58.310 billion, an increase of 11.5% over the proposed 2019–21 revision.
Some major NGFO spending items include:
- $278.1 million for an additional five days of K–12 instruction in school year 2021–22
- $90.7 million in 2019–21 and $147.4 million in 2021–23 for long-term care COVID temporary rate increases
- $146.5 million for home and community-based services enhancements
- $100.0 million for foundational public health
- $142.2 million for the working families tax credit
- $144.0 million for local government assistance
- $99.6 million to cancel state employee furloughs
(Like the Senate proposal, the House chair would appropriate federal relief funding. We’ll have more on that in another post.)
Interestingly, the House chair’s proposal balances over four years even without assuming 4.5% revenue growth in the second biennium. (Under the four-year balanced budget requirement, the budget must balance within available fiscal resources. Available fiscal resources include the greater of the official revenue forecast or 4.5% revenue growth in each year.) In their press conference, House Democrats said they did this to be conservative; the decision forgoes $1.443 billion.
The $1.816 billion withdrawn from the BSA would be appropriated to a new “Washington rescue plan transition account.” According to the budget bill, the account could be used to respond “to the impacts of the COVID-19 pandemic including those related to education, human services, health care, and the economy. In addition, the legislature may appropriate from the account to continue activities begun with, or augmented with, COVID-19 related federal funding.” It doesn’t look like any the House chair would make any immediate appropriations from the account. (He would transfer $305 million from the general fund–state to the account in 2019–21.)
At the press conference, Rep. Sullivan said that they are holding this funding in reserve in case it is needed. The funds could better serve that purpose if they remained in the BSA, which is subject to constitutional restrictions on its use. Because employment growth is forecast to be less than 1% in FY 2021, the Legislature needs only a simple majority to use the BSA right now. Next year, if the economy continues to improve, they may need a three-fifths majority. The new account would be subject to no such restriction. But it is that restriction that helps to ensure the reserves are actually there when needed.Categories: Budget.
Tags: 2019-21 , 2021-23