THE HOUSE’s top budget writer announced Thursday that he was introducing a separate bill to spend the additional $400 million or so that lawmakers think the Board of Economic Advisors soon will tell them they can spend next year. That would allow the full House, and presumably the Senate, to debate how to spend that money, and it’s in stark contrast to the way these late additions usually are handled — with budget negotiators making the decisions themselves and presenting them to the House and Senate for a single take it or leave it but you don’t dare leave it vote.
As such, it’s one of the most important signs we’ve seen that the House under new Speaker Jay Lucas really is committed to operating in the sunlight, as the House under Bobby Harrell increasingly refused to do.
It also raises an important question: What should lawmakers do with that money they hadn’t expected?
A lot of people — most vocally Sen. Tom Davis, who so far has held the Senate hostage for two days in an effort to get the Senate to spend $85 million from a state savings account on roads — say that money should go to repairing roads and bridges. And they’re partially right: Some of it should. Some, but not all.
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To understand why, we need to understand the two kinds of money legislators spend.
There’s one-time money, which you get when the fiscal year winds down and you find that more revenue came in than you expected. The speculation around the State House is that the BEA will give the Legislature permission to spend around $200 million in one-time money, based on stronger-than-predicted revenue growth in this current fiscal year.
This one-time money absolutely ought to go to road and bridge repairs, for two reasons. First, one-time money should not be spent to run programs and provide services, because that money won’t be around the following year. Lawmakers who spend that money to restore or expand programs will start the next year’s budget process in the hole; that’s something our Legislature used to do routinely, to disastrous results. Second, practically everyone in the business and political communities, along with much of the public, seems to agree that roads and bridges are our most important immediate funding need.
Now, most lawmakers argue quite fairly that using one-time money on roads won’t solve our problem, that we need a reliable, long-term source of funding to keep them up to working order, if we ever get them there. But the fact is that we still ought to use extra one-time money to reduce the backlog.
The other kind of money legislators spend is recurring money: the revenue you get year in and year out from the income tax and the sales tax and other sorts of taxes. It increases a little every year, usually along with inflation and population growth, and that’s the money that pays for all the operations of state government — or at least should.
If the BEA decides that the state is collecting an extra $200 million this year because our economy is stronger, and not because of some fluke, it will declare that there will be an additional $200 million in recurring revenue available, which the Legislature can spend to restore important programs that were cut during the recession.
And that is what the Legislature needs to do with that money, because there are far more than $200 million worth of important obligations that the Legislature defaulted on during the recession and now needs to meet: Sending cities and counties an additional $60 million that state law says they are supposed to receive to provide services that state law requires them to provide. Sending schools an additional $500 million that state law says they are supposed to receive to pay for teachers and supplies and other expenses that increase as the number of students grows. Providing colleges with an additional $200 million that the state used to provide them, the absence of which results in higher tuition. Paying for case workers who might be able to protect a few more children from being abused or neglected by their parents. There’s more, but those top the list.
As Sen. Davis and others argue that the state needs to use money it already collects rather than raising taxes to pay for road repairs, they overlook the fact that the state is already diverting money from general funding to road needs. Two years ago, the Legislature diverted $59 million a year from general funding to road repairs; that’s the money the state used to borrow $500 million to start working on roads. But that was just a down payment: The budgets passed by the House and Senate increase that amount to at least $100 million.
Granted, that’s not a lot in a $7 billion budget, but it is $100 million that was collected in order to pay for schools and police and courts and child protection and other essential state services, but isn’t being spent on any of that. That sort of diversion could be justified if the state were meeting its essential obligations. But, as noted above, it’s not. Diverting even that $100 million is irresponsible. To triple that amount would be inexcusable.
Ms. Scoppe can be reached at firstname.lastname@example.org or at (803) 771-8571. Follow her on Twitter @CindiScoppe.