The Senate- and House-passed supplemental operating budgets would spend almost all of the $13.8 billion surplus in funds subject to the outlook. Compared to the enacted 2021–23 biennial budget, appropriations would increase by 7.7% in the Senate-passed budget and by 10.6% in the House-passed budget. Compared to 2019–21, revised 2021–23 appropriations would increase by 23.3% in the Senate-passed budget and by 26.6% in the House-passed budget.

Both budgets would reduce revenues slightly. The Senate would direct more of the surplus to reserves than the House, but even the Senate’s effort falls short of reaching pre-pandemic levels of reserves.

Given the economic uncertainty and the recent Superior Court ruling that the capital gains tax is unconstitutional, the Legislature should reevaluate its spending priorities and put more into the rainy day fund this year.

Read the report here.