Senate Budget Committee Approves Budget Plan: Rejects Pension Shift, Agrees To One-Time Funding for Local Roads

The Senate Budget and Taxation Committee approved its plan to modify the Governor’s 2012 proposed budget, concurring with a large number of the actions taken by the House.  As a part of their plan, the Senate Committee concurred with the House to restore funding for education, rejected a Department of Legislative Services (DLS) recommendation to transfer 50 percent of teacher retirement expenses to the local boards of education, and concurred with a one-time payment of $13.2 million to counties and municipalities, $5 million and $8.2 million respectively, for local roadways. The Senate Committee also concurred with the House to rejected a DLS recommendation to direct all transfer tax revenue, which funds Program Open Space (POS) and other land preservation programs, to the General Fund and establish a statutory minimum funding level for all programs of $50 million.

For county governments, one major difference in the House and Senate plan is the shifting of costs for property assessments.  The House reduced the shift to 50 percent of the costs, whereas the Senate committee adopted the full 90 percent shift as proposed in the Governor’s budget.  The Senate proposal would cost county governments roughly $35 million annually, while the House’s lesser version would cost counties only about $20 million a year. Like the substantial range of issues where the House and Senate have different approaches, this item will be sent to a conference committee to develop a final fiscal plan for both the operating budget (HB 70) and Budget Reconciliation and Financing Act (HB 72). The Senate is likely to debate the budget plan on the floor next week, and the conference committee will begin work soon thereafter.

The Budget and Taxation Committee also included revenue from an increase in the alcohol tax.  After approving its budget plan, the Committee voted on a 3 percent increase on alcohol sales that would be phased-in over three years.  Revenue generated in FY 2012 would be used to fund developmental disabilities, a restoration of the disparity grant, and targeted education funding.

Other differences are in the areas of retiree health benefits and pensions, as well as a wide range of modest differences in state agency funding levels or restrictions.

Information outlining the difference in the House and Senate plans, as well issues remaining to be resolved, will be made available on the MACo blog in the coming days.  Press coverage of budget discussions can found at the links below.
The Daily Record
Associated Press

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