The budget package advanced to the final round of consideration is marked by notable mid-biennium adjustments, including a sizable sweep of cash funds to the state’s general fund – something the state typically won’t do until times of economic crisis – and a large ending balance that the Appropriations Committee has said is not available to be spent on state priorities.
Watch the latest video update from the team at OpenSky Policy Institute for information on changes to the budget adjustment bills – LBs 1412 and 1413 – made on select file and analysis of what the budget package means going forward. Passage of the bills is expected by Tuesday, March 26, the 50th day of the 60-day session.
While this budget increases spending over the biennium, a large chunk of it is statutorily required spending to fund the K-12 education state aid formula. Spending growth is just 1.5% in FY 25, the second year of the biennium, even with an additional $94 million going to TEEOSA. Low spending growth at a time when inflation is still running high is unlikely to sustain existing services.
Additionally, $198 million in new cash fund transfers to the general fund increases the budget’s bottom line, but not for the purpose of increased spending. Instead, the Legislature is diverting fees paid into the cash funds away from their intended purposes at a time when the state budget shows a surplus.
While debating budget adjustments, policymakers are mindful of income tax cuts passed by the body last year that will increase in cost. Looking at the Appropriations Committee’s budget proposal, the ending balance for the current biennium is $575 million. When we look at the following biennium – even after factoring in projected spending growth – that $575 million drops to $69 million. As noted by the Committee, that means there’s just $69 million to allocate to priorities beyond the budget bill.
The post VIDEO: What’s inside the state budget adjustments? first appeared on Open Sky Policy Institute.
