A New Beginning for the Budget Process: Consensus Revenue Estimates

Opinion by Representative Vincent Candelora

Two weeks ago, the legislature met to override several of the Governor’s vetoes.  One bill, which did not get a lot of press, was Senate Bill 1162, a bill that called for “consensus revenue estimates”.  The bill attempts to rewrite the entire budget process in light of the turmoil that the legislature and Governor has faced trying to come up with a budget.  My main criticism about this bill is that we passed a major restructuring of the financial process into law without a public hearing and with very little debate.     

Prior to this bill, the Governor would submit a recommended budget to the legislature in February.  This budget would incorporate her recommended spending and tax plans and would be created exclusively by the executive branch.  Afterwards, the Finance and Appropriations Committee, constituted by Senators and Representatives, would craft their own spending and tax plans by the end of April.  This plan would be presented to the General Assembly for a vote.  Typically at that point, the Governor and legislative leaders would get together, negotiate a budget, and produce a final product for the legislature to approve.

The consensus revenue bill now requires the Governor’s fiscal office (OPM) and the legislature’s fiscal office (OFA) to agree upon revenue projections prior to establishing a budget.  If these offices cannot come to an agreement, the Comptroller must act as arbiter and pick the number somewhere between the two numbers submitted by the two fiscal offices.  The Governor and the legislature then must craft a budget based upon this number.  Each quarter the offices must conduct this revenue estimating process over again, and if the number changes, the Governor and legislature must each resubmit a budget if no budget has yet been passed.

While it may make sense for the two branches of government to come to an agreement prior to crafting a budget, the rigorous schedule may actually interfere with the budget process rather than help it.  The new legislation requires a rigid structure that forces each branch of government to produce a budget every times the fiscal offices revise its revenue estimate.  So while the Governor and General Assembly are forced to agree on the amount of revenue before crafting their budgets, the legislation does nothing to help facilitate a budget.  The parties may be one day from agreeing on a budget and can be forced to restart the process if OFA and OPM submit new revenue estimates.  We have arguably politicized the process even more by requiring a quarterly review where multiple competing budgets will need to be produced prior to negotiating a final product.  I believe this process will undergo many revisions in years to come, and I believe its passage only demonstrates how difficult this budget process has become.  Given this economic crisis, I fear that we may be carving turkey before we have a budget with or without this new legislation.