During its operating budget decision meeting on March 15th, the House Appropriations Committee rejected three proposals in HB 589, the Budget Reconciliation and Financing Act of 2021 (“BRFA”) that would compromise county finances. The full House is expected to take up these budget decisions in the coming days.
As introduced, the BRFA proposes to increase counties’ reimbursement of State Department of Assessments and Taxation (SDAT) functions, including costs of real property valuation, business personal property valuation, and information technology. Since 2013, counties have reimbursed the state for 50 percent of the costs for these functions, but the BRFA proposes to incrementally increase this share to 90 percent by fiscal 2025 and each year thereafter. The cost shift would have placed millions of dollars on the backs of county budgets. The Committee voted to reject the cost shift.
In addition, the BRFA proposes dramatic, long-term reductions to community college funding by limiting formula increases to the level of projected general fund growth. Beginning in FY 2023, funding for community colleges would have been restricted to the fiscal 2022 appropriation plus the annual percentage increase in General Fund revenues above the estimated annual increase in General Fund revenues. The Department of Legislative Services estimates that this proposal would cut overall funding for community colleges by approximately $147.5 million by fiscal 2026. The Committee voted to reject this proposal.
Finally, the BRFA proposes that for all settlements entered into beginning in fiscal 2021, a local government must be responsible for 50% of any payments owed by the Board of Public Works (BPW) to an erroneously convicted individual. According to DLS, recent changes to state law may considerably increase the number of grants awarded by BPW. For instance, in fiscal 2020, BPW approved ten grants totaling $22 million. Because county governments have no authority or oversight concerning the prosecution of criminal cases, these grants are properly supported by the State’s General Fund. The Committee voted to reject this proposal.
The Senate Budget and Taxation Committee will take action on these items, with final determinations made by the Conference Committee, which will be appointed by both chambers.
Useful Links
Previous Conduit Street Coverage: Here We Go Again: Governor Revives SDAT Cost Shift to Counties
House Appropriations Committee: Full Committee Budget Decisions
MACo Testimony on House Bill 589 – Budget Reconciliation and Financing Act of 2021