Following the collapse of the tax reform effort, House Speaker Brad Wilson is urging his fellow Republicans to take a short break before plunging ahead with new spending proposals because the state is rapidly running out of money for anything but education.
“I said let’s just have a little breathing room for a week or two,” said Wilson about what he told House Republicans during Thursday’s closed caucus. “Let’s just let the budget issues settle and we’ll have a better feel for the landscape.”
That landscape could be a rocky one moving forward as lawmakers have plenty of money to spend on education, thanks to a massive projected surplus in the Education Fund, but there’s not a lot of extra money for the rest of the budget.
“The message that has gone out to the appropriations committees is it’s going to be a really tough year,” says Wilson.
“We had a conversation about what are the things that keep the lights on?” he continued. “There has to be a clear line between the things that pay the bills and what are the things that are nice to have?”
Speaking in an open GOP House caucus Thursday afternoon, Jonathan Ball, the Legislature’s top budget boss, threw a whole bunch of revenue/spending numbers at lawmakers.
But the bottom line was sobering.
Because of the imbalance between the General Fund (sales tax monies) and the Education Fund (income tax monies), the bulk if state programs will starve within two years.
How can this be?
This year alone the state will have $440 million in ongoing income tax revenue, with around $200 million in one-time surpluses. But the key is where those surpluses come from, not how big they are.
Ball said for the past several years, the Legislature has been taking about $173 million a year out of the higher education budgets in sales tax, moving it over into General Fund programs, like public safety, health and human services, corrections and such.
If lawmakers take another $173 million out of higher education this coming budget — fiscal 2020-2021, which starts July 1 — then there will only be around the same amount, $170 million, that could be transferred over in the following year, a budget set by the 2021 Legislature.
After that, unless something is done (another round of tax reform that sticks, and is not opposed by citizens) to balance out the two funds, General and Education, state basic programs will actually have to be cut. Or the sales tax raised, or extended to many services.
Wilson says this year’s budget, aside from education, is going to be making hard choices between needs and wants.
“We’ve got 150 open positions at the Department of Corrections,” he said. “They’re having a really hard time filling those. There’s only one way to solve that, make the wages more competitive. That seems like a need to me.”
Appropriations committees are currently scouring their budgets for funds they can repurpose elsewhere. Lawmakers will receive updated revenue projections in February that they’ll use to set next year’s budget.