Lawmakers Hear Proposals to Refine State Spending Controls

CBIA testified before the Appropriations Committee this week on a number of to refine mechanisms for controlling state spending.

HB 6353 gives the governor more flexibility and tools to manage the state during a fiscal crisis. The bill increases his rescission authority to 10% of the overall budget and 5% of state aid to municipalities.

Other measures are designed to increase legislative scrutiny of certain types of proposals that impact state and local spending. 

Both HB 5013 and HB 5454 require collective bargaining agreements and other state employee union pacts to be approved by both chambers of the legislature. SB 272 requires a two-thirds vote of each chamber to pass any new municipal mandate.

Spending Cap

Two proposals take different approaches to refining the state’s spending cap.

SB 310 offers clearer definitions of some key terms to ensure the integrity of the spending cap is protected and that any one-time expenditure outside of the cap doesn’t subsequently add to the state budget base going forward.

HB 6352 attempts to expand the types of spending that can be made exempt from the spending cap.

When the current spending cap was designed in the early 1990s, a great deal of thought was given to what would be acceptable in terms of potential reasons to exceed the cap in the event of extraordinary state fiscal circumstances.

Today, rather than rewrite the cap rules, it would be best to keep to those well-thought-out guidelines in place when it makes sense to allow expenditures outside the spending cap.

For example, new federal mandates from healthcare legislation are just the type of unexpected occurrences that are beyond the state’s control—and envisioned by the cap’s authors as exceptions.

On the other hand, other suggestions in HB 6532 are more problematic and outside of what policymakers thought prudent to allow when they created the cap.

CBIA urges lawmakers to be very careful about exempting spending from the cap and, when it makes sense to do so, keep to the existing remedies.

For more information, contact CBIA’s Pete Gioia at 860.244.1945 or pete.gioia@cbia.com.