Governor’s Proposed Budget: First Blush County Effects

The Governor’s proposed budget of $44 billion represents a 2 percent increase over the fiscal 2018 budget – and according to him, “responsibly holds the line on spending without raising taxes, cutting services, or raiding special funds.”

Most importantly to counties, the budget shifts nearly all costs of the State Department of Assessment and Taxation onto county governments – raiding county coffers, rather than “special funds.”  It makes counties responsible for 90 percent of all costs associated with assessment functions, information technology services and the Office of the Director.

Counties currently fund 50 percent of costs for assessment and information technology functions.  Nothing provides county governments any additional say in the management or oversight of these state functions – counties merely are invoiced for the costs.

The budget funds K-12 education at $6.5 billion, $100 million more than last year and in accordance with applicable statute. Community colleges receive $261 million through the Cade formula and grant funding. School construction projects total $365 million.

The budget includes $178.1 million in highway user revenues, in addition to $53.7 million in additional local transportation grants. This is approximately 8 percent more than last year, which included $175.5 million in highway user revenues and $38.4 million in additional grants. Last year, 23 counties received $12.8 million in grant money, after the legislature cut counties’ portion from the Governor’s proposed $27.4 million. This year, the Governor is proposing $27.8 million to those counties.

Like last year, this year’s the Budget Reconciliation and Financing Act (BRFA) includes language to flat fund local health departments in fiscal 2019 at fiscal 2017 levels, at $49.5 million. Unlike last year, it does not flat fund local police aid.

The BRFA includes uncodified language on the last page which states that, beginning in fiscal year 2020 (so, not the upcoming fiscal year, but the year after), funding increases for all programs (other than specific K-12 education programs, Rainy Day Fund deposits, debt service payments and pension fund payments) are capped at 1 percent less than the reported amount of general fund revenue growth.

It also includes this provision to tie the General Assembly’s hands:

[T]he General Assembly may not enact legislation that creates a new required level of funding in the annual budget bill for a future fiscal year for a specific program or item or increases a required level of funding in the annual budget bill for a future fiscal year for a specific program or item unless it also enacts legislation at that same session that reduces or repeals an equivalent amount of required funding for the same fiscal year.