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Sunday, March 20, 2011

The Budget

Today is the 70th day of the 82nd Regular Session, the halfway mark. The budget, the only bill that must pass, is scheduled to be voted out of House Appropriations this week and to hit the House floor next week. Of the Governor's five emergency items, four have passed the Senate: eminent domain; sonogram; balanced budget amendment to the U.S. Constitution; and voter ID. The House has passed sonogram (different version from the Senate), and is scheduled to consider the voter ID legislation on the floor today. Sanctuary city has passed out of House State Affairs. In general, the legislature has made workmanlike progress on the priorities of the Republican legislative leadership.

However, there is a growing chasm between the House and the Senate on the budget. The Governor and House leadership have agreed to spend $3.2 billion from the Rainy Day Fund to balance the FY 2010-11 budget. But, the Governor and House leadership have stated that they will not spend anything from the Rainy Day Fund for the FY 2012-13 budget, nor will the House pass any tax revenue increases. This will result in a House budget for FY 2012-13 of approximately $77 billion of general revenue spending. The FY 2010-11 budget was approximately $87 billion of general revenue spending, including federal stimulus funds of $6.4 billion.

The votes are not there in the Senate Finance Committee to pass a $77 billion budget, much less in the Senate itself. To pass the Senate in Regular Session, the budget will probably need to be at least $83 billion in general revenue. In other words, the Senate is looking to spend at least $6 billion more than the House. If the House says no more Rainy Day Funds and no additional tax revenue, it is going to be very difficult to find the additional money. At this point, you would have to say one or more special sessions is a growing possibility.