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Sustainability of state budget remains in question | GUEST OP
By Rep. Mark Hargrove
For the Reporter
Now that the fog has lifted from the three special sessions in November/December, March and April, and the regular legislative session that ran January 9 to March 8, I'd like to offer my thoughts on the final operating budget and government reforms passed this year.
On Feb. 17, House Republicans offered the first balanced budget solution during the 2012 regular session. Our budget funded education first, in a separate budget, then prioritized services for the most vulnerable and public safety. We made tough decisions, but if we want to get our budget under control, programs we cannot afford today or tomorrow need to be reformed or eliminated.
While minority House Republican budget solutions were rejected by the majority party, I believed that in the absence of a House or Senate Democratic budget, it was important to start the dialogue about how we craft a balanced, sustainable budget. When the House and Senate Democratic budgets finally appeared, there were serious flaws, including pushing $330 million in delay of payments to schools, which ultimately would have led to a $2 billion deficit in the next biennium's budget.
The good news is that, in a rare development, a bipartisan coalition formed in the state Senate. This philosophical majority forced the debate on how we responsibly reform government to address long-term fiscal stability and balance the budget within reasonable tax collection expectations. Because of this coalition, we were able to enact several much-needed, long-overdue government reforms, including:
Senate Bill 6378: is a pension reform policy that only applies to newly-hired employees beginning in 2013. The state's pension system is among the biggest cost-drivers in state government. This reform is expected to save public employers and taxpayers approximately $1.3 billion over the next 25 years.
Senate Bill 6636: This legislation requires budgets to balance across four years, meaning the current two-year cycle plus the next two years, before they are adopted. This requirement, thought to be the first of its kind in the nation, will force legislators to consider the long-term costs of their spending choices. This practice will stop budget writers from using gimmicks, such as the delayed school payment Democrats proposed, to balance the current budget by pushing the problem to the next two-year budget.
While my seat mates, Rep. Pat Sullivan and Sen. Joe Fain, and I supported these reforms, I could not support the final budget. My two main concerns with the final budget were the low ending reserve balance and the lack of additional reforms to rein in spending.
The House Republican budget would have left more than $600 million in ending fund reserves to help our state weather a downturn in the economy. The final budget passed leaves just $318.9 million in reserve, $238 million of which is simply a one-time accounting change that doesn't actually change the amount of money coming in or going out. This leaves just $80.9 million in actual reserves. To me, that isn't a responsible reserve given the fragile nature of our economic recovery.
The budget that passed was far better than the starting product, but tough choices were not made to reform programs that continue to make our budgets unsustainable. A frustration is that when one party had complete control, this problem wasn't fixed, causing us six special sessions in two years. It was only when the Senate coalition forced bipartisan negotiations that we finally came to a solution.
My hope is when we return next January both parties will work together to focus on the priorities of government that will lead to sustainable budgets. Fortunately, this budget made some important first steps to get us on that path, but more work remains.
Rep. Mark Hargrove, R-Covington, represents the 47th Legislative District. He is the ranking Republican on the House Transportation Committee. He also serves on the House Education and Education Appropriations and Oversight committees.