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Published on Friday, June 7, 2013

Budget stalemate broken?

Earlier in the week, House Democrats unveiled a new operating budget they characterized as a compromise designed to finish their work and adjourn the Special Session on time – June 11. Late in the evening of June 6, they passed their budget and an accompanying bill to eliminate a small number of tax loopholes – dedicating that additional money to help fund K-12 education.

For cities, this new budget thankfully doesn’t cut liquor revenue or other state-shared revenues. It does hit hard on the 66 cities that applied for, and had been tentatively approved to receive, 2013-2015 Public Works Trust Fund loans to address critical infrastructure needs. The entire account of approximately $400 million is proposed to be swept for the biennium. If the Senate and Governor agree to this proposal, these 66 cities won’t get monies for their projects and many jobs connected to them won’t materialize. As we’ve been signaling, it’s important for project cities to connect with your legislators to express the importance of maintaining this critical program.

Senate Majority Coalition leaders are not talking publicly about when and how they plan to respond. As noted in a recent CrossCut article that contains budget details and analysis, they are engaged in negotiations with the House and aren’t negotiating in the press. The Governor and his key staff are also very engaged.

How this helps or hurts chances for passage of a Transportation Revenue Package isn’t clear. What has been clear is that a transportation package can’t or won’t pass until an operating budget agreement is reached. Also yet to be revealed is the size and content of a Capital Budget. Absent loans for any Public Works Trust Fund projects as noted above, how and where will jobs be created as a result of legislators’ work?

We also don’t know whether or not a new DUI bill will emerge. Interestingly, there isn’t funding for new DUI efforts in the new House-passed budget. Maybe it’s up to the Senate to include that as part of their response.

The clock is ticking and we’ll know more in the hours ahead as this unfolds as either a path to adjournment or another stalemate that could prompt the need for another Special Session.