Today House Appropriations Committee chair Timm Ormsby proposed a 2018 supplemental operating budget that would increase 2017–19 near general fund–state plus opportunity pathways (NGFS+) spending by $377.4 million. 2017–19 NGFS+ appropriations would total $44.086 billion.

This proposal would spend $727.2 million less than the Senate chair’s proposal, which was released yesterday. (For more on the Senate proposal, see here and here.) The big difference is that the House chair’s proposal—unlike the Senate chair’s or the governor’s—would not fully fund the increase in school salaries in school year 2018–19. The increase would still be fully funded in SY 2019–20, as planned in 2017 legislation.

This goes against the state Supreme Court’s Nov. 2017 order, but the House chair’s proposal doesn’t completely ignore the Court. It would create a new basic education account to hold the McCleary fines, and it would transfer $105.2 million from the general fund–state (GFS) to the account. (That said, those funds would then be appropriated for basic education spending—something the Court explicitly said not to do.) Also, the proposal would transfer $1.1 billion from the GFS to the education legacy trust account. As both of these accounts are part of the NGFS+, it doesn’t show up on the balance sheet, but the idea is that the funds would be saved there to pay for the final step up in compensation in SY 2019–20.

Like the Senate chair’s proposal, the House chair’s would reduce state property taxes—but the House proposal goes farther. It would reduce the state rate to $2.365/$1,000 of assessed value in CY 2019 and to $2.30/$1,000 in CY 2020. This would be paid for with a transfer from the budget stabilization account (BSA, or rainy day fund) in the amount of $995.8 million. (Here’s our recent brief on the Legislature’s use of the BSA, which generally requires a three-fifths majority.) Additionally, the proposal assumes passage of HB 2967, which would impose a capital gains tax and allow for reductions in the state property tax after 2020. (Here’s our brief on the capital gains tax proposal.)

The House proposal would leave unrestricted NGFS+ ending balances of $2.244 billion in 2017–19 and $422 million in 2019–21. Accounting for the transfer from the BSA to pay for property tax reductions, the BSA ending balance would be $697 million in 2017–19 and $1.222 billion in 2019–21.