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Published on Tuesday, February 23, 2016

House Democrats release supplemental budget proposal

As expected, the House Democrats released their supplemental budget proposal yesterday afternoon. In a number of ways, it was very similar to the Governor’s proposed supplemental budget from December.

First, AWC is pleased that the proposal does not include additional diversions of revenues shared with cities. Not surprisingly, it takes the remaining $10 million in revenue from the Public Works Trust Fund as previously decided in the 2015-17 operating budget.

Second, it includes an additional $49 million for mental health programs and services and $60 million for homelessness, including homelessness assistance, temporary beds for homeless youth, and two new grant programs for homeless students. AWC appreciates this investment in homelessness and mental health support as cities around the state wrestle with these challenges.

Third, it repeals or limits six tax exemptions, including the nonresident sales tax exemption, the bottled water sales tax exemption, and the REET exemption on foreclosure sales. This would generate an estimated $120 million, which would primarily be used for teacher recruitment and retention.

Finally, we previously wrote about the huge decline in Model Toxics Control Account (MTCA) revenue and our concern that many previously funded city projects could be on the chopping block. We’ll know more about the House’s preferred approach to the MTCA shortfall when they release their capital budget on Wednesday.

We also expect to see a third proposed supplemental operating budget proposal on Wednesday - this time from the Senate Republicans. Check back for updates.

Categories: Budget & finance