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Published on Wednesday, June 12, 2013

Still no state budget, what happens next?

The 30-day special session clock has run out and legislators today began their next special session during which they must adopt a state operating budget.  They don’t have 30 more days to do this – it must be agreed to and signed by the Governor by sometime June 30th or technically, the state isn’t authorized to spend money not appropriated in an adopted budget. 

As the House and Senate prepare to find a compromise, it’s helpful to have a glimpse of the different budget approaches each has taken as it relates directly to cities. 

The House passed a new somewhat slimmed down version of their budget during the recent special session.  For cities, it included the good news that reductions in state-shared revenues were not made and it reinstated $50 million in liquor excise taxes that were not fully funded last year.  The disturbing news was the elimination of any funding during the next biennium from the Public Works Trust Fund.  Approximately $400 million was diverted to the state’s general fund.  $231 million of that was for loans to 66 cities.  Ouch.

The Senate passed a budget at the end of the special session.  Like the House budget, it didn’t further reduce state shared revenue to cities.  Unlike the House, it only partially restored liquor excise taxes at $25 million.  Also unlike the House, it kept a slimmed down Public Works Trust Fund, but permanently diverted several revenue streams supporting it.  Ouch.

While other people try to figure out what it would mean if there isn’t a budget agreement by then, AWC continues to promote the need to finish the budget on time.  We are being briefed later this week on what it might mean to cities in there isn’t an agreement and we’ll report on that and other news late Friday June 14th in our abbreviated Legislative Bulletin.  In the meantime, please consider connecting with your legislators and urge them to finish their work and do so by fully reinstating shared liquor excise taxes and without descimating the Public Works Trust Fund!

Categories: State budget
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