01 June 2009

Committee action, Jun. 1: HB 497, HCR 160

HB 497 by Rep. Nita Hutter would direct monies from the Budget Stabilization Fund to higher education. Hutter explained this area would not get shortchanged as it was now, but also offered up amendments that would alter the bill to suspend its provisions with a declared state of emergency by the governor.

Rep. Eddie Lambert argued there were other alternatives, and that with this bill all other agencies would be sacrificed. “Wouldn’t this kind of put us in a straitjacket?” he asked. Hutter argued this would protect higher education, and said every other agency pretty much was protected already. Lambert said he wasn’t sure he agreed with that assessment. The amendments then were adopted.

House Appropriations Committee Chairman Rep. Jim Fannin editorialized saying the areas of higher education and health care already got 65 per cent of the general fund and this would take away flexibility. Hutter closed by saying higher education was just a portion of that and that the Legislature would still have flexibility in that a two-thirds vote would be required to transfer the funds. She said this would be a vote for higher education.

Rep. Joe Harrison moved favorably on it, but Lambert made a substitute motion to defer the bill. He said there needed to be flexibility and this would narrow the purpose of the fund so much as to moot its point. The motion to defer succeeded 11-9.

HCR 160 by Rep. Karen Peterson would allow the one-third of the Fund to be used this fiscal year, requiring a two-third vote. Then it would have to be recognized by the Revenue Estimating Committee in order to be used for budgeting purposes. Rep Brett Geymann asked what the overall fiscal impact of the bill would be, given the requirement that it be replenished with “excess” mineral funds.

Gordon Monk, head of the Legislative Fiscal Office, said this year $258 million could be taken out, but then next year excess mineral funds of $243 million would be required to be put in, so there wasn’t much to be gained over the two-year time span. Geymann said then the Fund could not be used next year. Peterson said doing it now would buy time to have plenty of time for an orderly plan to cut next year. Geymann wondered what would be the impact if waiting for next year; Monk thought at current rates there wouldn’t be a lot of difference.

Closing, Peterson said it was a potential solution to the current budgetary struggles. Fannin objected to a motion for passage, however. He said this was “one-time” money to be used in “extreme” situations. He said it would get worse before it got better, and tough choices were best made now to avoid tougher ones later. Rep. Page Cortez said was there a rush on, and Peterson said there was still time to wait and move it later. So, she decided to voluntarily defer it.

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