April 2, 2021
Yesterday the Senate passed its operating budget. As passed, the 2021 supplemental to the 2019–21 budget would appropriate $52.704 billion from funds subject to the outlook (NGFO). That’s a reduction of 1.9% from the enacted 2020 supplemental, but an increase of 17.9% over 2017–19.
The 2021–23 biennial budget would appropriate $59.282 billion from the NGFO, an increase of 12.5% over the 2021 supplemental. As I noted earlier this week, the Ways & Means Committee had approved a version of the budget that left just $1 million in unrestricted reserves at the end of 2023–25. Floor amendments yesterday improved that figure to $50 million. The improvement was primarily due to a technical amendment that corrected funding amounts for the expansion of the Early Childhood Education and Assistance Program (ECEAP).
Additionally, the Senate would appropriate $6.300 billion of federal relief funds over 2019–21 and 2021–23. That includes $1.057 billion in funding that had been appropriated in HB 1368 (the early action supplemental) or allocated by the governor but that will not be spent by the end of fiscal year 2021. It does not include all federal relief funding—for example, it doesn’t include the impact of the enhanced federal funding for Medicaid. It also doesn’t fully appropriate the funds the state will get from the latest federal relief bill. (We will have more on the federal relief appropriations in a future post.)
A few other notes on the budget proposal:
- There are some indications that the budget would use federal relief funds for ongoing programs. A major example is child care. Sec. 229(5) notes the “substantial additional funding” the federal government has provided in the pandemic relief bills for child care. It adds that the Legislature intends to “implement these federal purposes” by passing E2SSB 5237. “The legislature finds that the state lacked the fiscal capacity to make these investments and the additional federal funding has provided the opportunity to supplement state funding to expand and accelerate child care access, affordability, and provider support as the state navigates the COVID-19 pandemic and its aftermath.”
- The House proposal would appropriate the rainy day fund (the budget stabilization account, or BSA) balance to a new account without the BSA’s withdrawal restrictions. The Senate would do something similar by transferring the $1.820 billion from the BSA to the general fund–state (GFS) in FY 2021, and then transferring $800.0 million from the GFS to the disaster response account for FY 2022 “to be available for appropriation in case of unanticipated disaster and recovery efforts.”
(Previous posts on the budget proposals are available here.)Categories: Budget.
Tags: 2019-21 , 2021-23