Voters want Leg. to end on time. Could these ideas help?

When the Legislature needed overtime sessions to complete its work this year and in 2013, it wasn’t much of a surprise. Special sessions were commonplace after the last recession started. When partisan control of the chambers split in 2013, it just seemed all the more likely legislators would go into special session.

As Jason Mercier of the Washington Policy Center points out, the special sessions in 2013 and 2015 were different in one major respect. No longer were legislators fighting over cuts and carving up a smaller state budget pie. Though the state was under funding pressure thanks to the McCleary decision, the fact remains that tax revenues were growing rapidly. Special sessions were needed to fight over a growing pie.

Voters don’t care much about the reasons – they’re just clear that they want the Legislature to complete its work in a timely fashion. Blowing past deadlines and taking the state to the brink of a shutdown displeases them.

That has some asking, are there changes to the law or the Legislature’s procedures that would lessen the chances of special sessions and June 30 budget signings? Mercier shows examples from around the country of tools other states use to avoid the same fate. One of these could help legislators avoid wasting taxpayer dollars and needless uncertainty.
– Rob McKenna

Budget reforms needed to remove threat of government shutdown

By Jason Mercier, Washington Policy Center
August 7, 2015

During the last two biennia Washington has come dangerously close to a state government shutdown. The current 2015-17 budget was signed just 18 minutes before a shutdown (signed at 11:42 p.m. on June 30) while the 2013-15 budget was approved a few hours before the new budget cycle (signed at 4:20 p.m. on June 30, 2013). In both cases revenue was increasing substantially meaning these threats of government shutdowns were occurring with budgets growing significantly, not due to deficits.

There is no reason why a government shutdown should ever occur, even in a deficit situation. To avoid this threat going forward lawmakers should consider reforms to the budget process to help provide certainty to those that rely on vital government services that the doors of government will not be arbitrarily closed due to political impasse. Here are three options lawmakers could adopt:

Early Action Base Budget
The first option lawmakers could adopt is an early action base budget like Utah does. Here is how that process works:

  • The base budget process is set byUtah’s legislative rules.
  • An Executive Appropriations Committee (made up of members from Senate and House) meet in December to approve base budget framework (session starts in January).
  • The base budget spending level is set at the current fiscal year’s spending if revenue forecast is same or greater; if less base budget spending reduced by corresponding percentage.
  • On the first day of session lawmakers are provided copy of base budget to debate.
  • All lawmakers serve on budget committees.
  • No earlier than the 3rdday of session but not later than the 16thday of session the legislature must approve or reject the base budget.
  • The rest of session is spent debating the “big bills” that adds to or takes away spending from base budget (the “real” budget).

Steven Allred, Deputy Director of Utah’s Office of the Legislative Fiscal Analyst, provides these additional details:

By legislative rule, Utah’s legislature must complete their action on base budget by noon on the sixteenth day of each general session. Utah’s Constitution requires the governor to act on bills and return them to the Legislature within ten days if the Legislature will still be in session. (The governor has twenty days to act if the Legislature will not still be in session after ten days). By passing the base budget by day 16, the Legislature will still be in session (Utah has a 45 day general session) to act on any potential vetoes from the governor. This process assures that a base budget will be in place so state government can continue to operate in the next fiscal year in the event that budget negotiations fail and the general session ends without an agreement on additional spending. While such a stalemate has never occurred in recent memory, the base budget process adds greater certainty to the budget process.

Every Utah legislator sits on one of eight appropriations subcommittee that spend the first two weeks of each general session scrutinizing the base budget. In this process they often find potential adjustments; for example, in 2015’s base budget review, subcommittees identified nearly $156 million in potential offsets and reductions. This review is not just to cut the budget – but to be sure the appropriations contained in these bills match the highest priorities.

If Washington were to use a similar process budget writers from the House and Senate would meet sometime between the November revenue forecast and the beginning of session to agree to a base budget framework to make sure the current spending levels could be maintained under the projected revenue. Then lawmakers would review and approve the “base budget” during the first weeks of session so that appropriations would be authorized to continue state government operations at current spending levels in case of a budget impasse.

The rest of session would then be spent debating whether to increase or decrease the “real” budget from the base levels to reflect the updated revenue numbers from the February forecast.

Continuing Budget Resolution
Another option lawmakers could consider would be to enact a continuing resolution during the last week of session if no budget agreement has been reached. This is similar to the Utah base budget process but happens at the end of session instead of at the beginning. As we previously highlighted, examples of states with this budget failsafe process include New Hampshire, North Carolina and South Carolina.

Had it been necessary this year, Sen. Hill introduced PSSB 6051: Continuity of State Government on June 25 to avoid a state government shutdown.

Automatic spending authorization if no budget
Both the early action base budget and continuing resolution options still require the Legislature to take action to avoid a government shutdown. Though the hope is that they would do so, there is no guarantee. This is where the automatic continuation of spending at current levels utilized by Rhode Island and Wisconsin may be worth considering.

Here is how the Rhode Island Budget Office describes the process:

The general laws of the state provide that if the General Assembly fails to pass the annual appropriation bill, amounts equal to those appropriated in the prior fiscal year shall be automatically available for expenditure, subject to monthly or quarterly allotments as determined by the Budget Officer. Expenditures for general obligation bond indebtedness of the state shall be made as required regardless of the passage of the annual budget or the amount provided for in the prior fiscal year.

Here are the details from the Wisconsin Budget Office:

To meet the state’s budgetary cycle, the budget should be signed and effective by July 1 of the odd-numbered year.  If there is a delay, state agencies operate at their appropriation authority from the prior budget until the new budget is in effect.

Due to the restrictions in Article 8, Section 4 of the Washington Constitution, utilizing this type of process would likely require a constitutional amendment:

No moneys shall ever be paid out of the treasury of this state, or any of its funds, or any of the funds under its management, except in pursuance of an appropriation by law; nor unless such payment be made within one calendar month after the end of the next ensuing fiscal biennium, and every such law making a new appropriation, or continuing or reviving an appropriation, shall distinctly specify the sum appropriated, and the object to which it is to be applied, and it shall not be sufficient for such law to refer to any other law to fix such sum.

Whether through adoption of a base budget process, approval of continuing resolutions, or constitutional changes to authorize continued spending at current levels until a budget can be adopted, there should never ever be the threat of a government shutdown in Washington again. Ideally lawmakers would be able to come to a budget agreement during the 105 day regular session but as history has continually demonstrated we can’t be assured of that outcome. Budget reforms to help prevent a state government shutdown from ever occurring are worth considering.

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.