As I mentioned in yesterday’s update, all the big finance bills, often referred to as “ominibus” budget bills have been passed by both the House and Senate. There remain major differences to be worked out between the majority leadership in the House, Senate and the governor’s office. The deadline for that happening was yesterday – Monday, May 6.
Those talks hit a snag last night primarily around the House and governor’s proposed $12 billion in new tax and fee increases over the next four years.
Senate Majority Leader Gazelka at the conclusion of last night’s negotiations commented that neither the House leadership, nor the governor’s team, were willing to drop even one cent of the proposed $12 billion in new tax and fee increases.
Here is a look at just two major funding differences linked to the proposed massive tax increases:
The governor/House both propose a 20 cent gas tax increase and significantly increase annual license tab fees. They would divert about $450 million of funds raised by the 20 cent gas tax hike to replace $450 million of current statutorily dedicated road and bridge funding generated by the sales taxes we already pay on tires, batteries and auto repairs.
The Senate approach does not raise the gas tax and continues to dedicate sales tax dollars on auto parts and repairs to roads and bridges. With a strong economy and a billion-dollar budget surplus, roads and bridges can be properly funded without raising the gas tax.
The House/governor would take the $450 million they rob from current roads and bridges and spend that on other parts of the budget such as education. If the $450 million cut to current transportation funding is dropped, then the House/governor’s proposed increase in education spending could be about $463 million and the Senate is proposing a $228 million increase in education spending.
There appears to be room to work on closing the gap between $463 million and $228 million in proposed new education spending, provided robbing $450 million in dedicated transportation funding is dropped.
We have 13 days left before we reach the Legislature’s constitutionally mandated adjournment. That is enough time to get a good state budget in place, provided we stop defaulting to a massive increase in taxes as the solution.
I will keep you updated as we continue to work on reaching an agreement.