House proposed operating budget release today following last week’s passage of the Senate operating budget 25-24 – with good/bad news for cities

Here is a quick comparison of the key city impacts from the Senate budget passed on a partisan vote last week, and what is proposed in the House Democrats budget unveiled this afternoon, which is likely to be acted upon by Friday. It’s important to note that the Senate-passed budget spends $43 billion and includes revenues to support it, while the House proposed budget of $44.7 billion includes some new revenues that won’t be considered and acted upon until early next week. Some of these revenue options will also increase local revenues.

• Thankfully, the Senate-passed budget fully funds critical and long-standing shared revenues, as does the House Democrat’s proposal. That is encouraging and appreciated, but not a “done deal” until they negotiate a final budget and send it to the Governor.
• The Senate one takes a swipe at every city’s budget by eliminating close to $70 million dedicated to helping pay a portion of police and fire personnel pension costs, whereas the House proposal honors the longstanding commitment to share funding of these costs.
• The Senate maintains a portion of Public Works loan repayments to fund some projects for the first time in four years. While significant diversions are made, this proposal is still better compared to no funding the last four years. The House mirrors this approach, but provides somewhat more funding.
• The Senate falls short in support for human services and help for the homeless, notably through significant cuts to the Temporary Assistance for Needy Families (TANF) and Housing and Essential Needs (HEN) programs. The House maintains and increases funding for human services and housing programs.
• The Senate fully funds a larger share of marijuana revenues to be shared with cities and counties that don’t ban the sales, and the House proposes eliminating that increase.
• The Senate continues funding support to warehousing cities who receive sales tax streamlining payments, whereas the House signals elimination of those in 2019.
• Both budgets provide funding for the Municipal Research and Services Center (MRSC), although the Senate one requires an alternative funding assessment be developed and submitted in the fall of 2018, or else funding is reduced.

The House will grapple with the Democrat’s proposed budget this week and their proposed revenue enhancements early next week. Assuming both bills move forward, then serious negotiations commence to reconcile differences in their approaches, which are summarized on a matrix found here. Further information on other program changes are included in this issues updates in this Bulletin.

Even though much of what both budgets propose is encouraging for AWC and cities, we know full well from past experiences that our needs may well fall off the budget table when negotiators have to slice and dice to find agreement. That is why it is critical now that cities thank legislators for their work done so far and express concern for areas still in need of attention. We are encouraging all cities to participate in our AWC Lobby Day next Monday, April 3. Check out information in this Bulletin on how to add your voice (even from home) for this effort.