961- HOUSE NEWS

FYI.. FROM TINA SABLAN

PRESS STATEMENT

ON THE BUDGET:

We don’t have a budget yet, and frankly I think that everything else that we’re doing in the Legislature should be put on hold until we pass a balanced budget. Passing the budget is the single most important responsibility of the House of Representatives.
Part of the difficulty we are having in passing a budget is that the government has not followed the Planning and Budgeting Act. This includes both the Executive and Legislative branches, and goes back to the 15th Legislature. Under the Planning and Budgeting Act, the proposed budget should include:

• A balanced budget, meaning revenues should have been equal to outlays;

• A detailed, current estimate of all the anticipated financial resources of the Commonwealth, including Covenant funds, unobligated balances, federal loans, grants, and other monies, a breakdown by type, and whether or not they are available to be appropriated;

• A statement of the basis for all estimates of financial resources, including a comparative analysis of available data for the two complete past years and the current year;

• Schedules of amounts obligated in the two complete past years, the amounts appropriated in the current year, and the amounts proposed to be appropriated for the budget year;

* A proposed balanced budget was supposed to have been prepared and submitted no later than six months before the beginning of the fiscal year. Any adjustments or amendments should have been submitted no later than three months before the beginning of the fiscal year. This means that a balanced budget should have been submitted in April 2007, and adjustments should have been submitted in July, and the Legislature should have taken final action on the budget within 30 days.
The proposed budget wasn’t submitted, however, until September 2007, just weeks before the end of the fiscal year. It was also an unbalanced budget because it makes several problematic assumptions, including a Retirement Fund employer contribution of 11% (it is actually 18%), and the enactment of the unpaid holiday bill which has yet to pass in the Legislature, among other things. Moreover, not all of the information that we need (for example, actual expenditures for the past two years, or even just the past year) has been provided in the proposed budget plan.
There has been discussion among the legislators about passing a continuing resolution, since we are already in the second quarter of FY 2008, and focusing instead on a budget for FY 2009. Another suggestion has been to pass a balanced budget that corrects the Governor’s previous assumptions, which would very likely mean more job cuts, or another across-the-board salary decrease (either a flat rate or proportional), or a tax increase, or a year-long suspension of rebates, or a combination of these measures. It has also been proposed that the Governor should be granted the same unlimited reprogramming authority he had from the 15th legislature to provide for critical services, such as public health, public schools, and public safety.
I think it would be absolutely irresponsible of us to pass a continuing resolution and allow this government to operate on the same spending level as it did last year. A continuing resolution is a guaranteed ticket to more government inefficiency and ineffectiveness. It means even more uncertainty in this already-uncertain time. When regular appropriations are delayed, agencies don’t know how much money they truly have to spend, and may try to hoard funds, not obtain the resources they need to do their jobs, or end up overspending. We simply cannot afford to pass a continuing resolution.
Most of us would agree that the responsible thing to do would be to pass a balanced budget as soon as possible. If we don’t have the information that we need to pass a balanced budget now, then we return the unbalanced budget to the Administration and go back to the table with them to agree upon the measures we would take to cut costs, generate revenue, or both, in order to realize a balanced budget.
I further disagree with the proposal to give the Governor unlimited reprogramming authority. It would certainly be easier to blame him if anything goes wrong, but I truly believe we would be shirking our own responsibility to be fiscally prudent and to provide oversight in the expenditure of public funds. Why not follow the guidelines for reprogramming that are provided in the Planning and Budgeting Act?
The Planning and Budgeting Act already gives the Governor reprogramming authority for the operations and activities of the Executive Branch, including all those critical services that fall under his jurisdiction – up to 25%. He certainly has the power to reprogram more if he declares a state of emergency. Otherwise, to reprogram more than 25%, the Governor must submit his request to the Ways and Means Committee and the Senate Committee on Fiscal Affairs, and his request would be considered approved unless either Committee disapproves the request within 20 calendar days. If the reprogramming request is truly to provide for critical services, why in the world would either committee disapprove? This way, we all share responsibility for providing for those critical services, and the burden does not fall on only one person to decide what is critical and what is not.
Looking ahead to Fiscal Year 2009 – we should be thinking now about ways to avoid repeating the problems with which we struggle in this fiscal year. It would not be a waste of time or money to begin government-wide desk audits and performance evaluations, overhauling our personnel management policies and pay scales, and eliminating duplications between agencies. It would be an investment. I also think we should implement meaningful penalties for failing to meet the deadlines stipulated in the Planning and Budget Act. At a minimum, legislators and the governor and lieutenant governor should not get paid until a balanced budget has been passed.

Thank You,
Tina Sablan

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