The state’s newly adopted budget includes a $250 million across-the-board reduction for most of state government; but a certain clause in the budget threatens to undo these cuts and eliminate a quarter of a billion dollars in savings to taxpayers, should certain conditions materialize.
In Article IX, Section 18.25 of the state budget, appropriations to all state agencies and higher education institutions-save the Foundation School Program, the state Medicaid program, and debt service-are proportionally reduced by $250 million for fiscal year 2013. But a handful of paragraphs later, in Article IX, Section 18.55, the reductions are made contingent based on the availability of revenue.
From Section 18.55: After fully funding three other items, “the Comptroller shall, to the extent that funds are available above the sum of the January 2011 Biennial Revenue Estimate and any additional general revenue certified as of the date of the enactment of this Act, restore the $250,000,000 appropriation reductions…” In other words, if the Comptroller finds additional money for state agencies to spend, they will.
All of this begs the question: Is this really the time to consider reversing cuts? National and state economic growth remains uncertain; the state’s 2012-13 budget is already expected to run well-over its appropriated total, requiring a large supplemental in 2013; and, as we’ve shown in the past, state agencies and higher education institutions have, in totality, enjoyed decades of spending growth that has far exceeded population and inflation increases.
Taking all of this into consideration, this may be an instance where the Governor considers putting his line-item veto to use.
-Samantha SolizResearch Fellow, Center for Fiscal Policy