Appropriations Chairman England: Everything Is On The Table

The following is a guest Op-Ed from House Appropriations Chairman Terry England.

When I became House Appropriations Chairman in 2011, I thought digging our way out of the Great Recession would be our only big budget challenge.  

We worked hard to erase the damage caused by the recession. And by 2018 state revenues had grown enough that we finally had the money to fully fund the school funding formula, to top off the state’s reserve fund at an amazing $2.5 billion, and even to cut the income tax rate for the first time in the state’s history.  

The two keys to our success were conservative budgeting — we are 50th in the nation in per capita spending increases since the start of the recovery — and a close working relationship with the Governor’s office and the Office of Planning & Budget (OPB).  

I had every reason to expect the annual budget process to remain smooth. And last year, the legislature at Gov. Kemp’s request gladly approved $3,000 annual raises for every certified employee in the state’s public school systems.

However, just five weeks after the implementation of those raises, there were some bumps.  Revenue growth slowed down, and the Governor in early August directed agency heads to submit written proposals for significant budget reductions both in the current fiscal year and in the next one starting July 1.  

But when the legislature scheduled joint budget hearings in September to learn more about the proposed cuts, agency heads were told not to attend.

 
Then at our regular budget hearings last week, many commissioners remained very vague in their remarks, often directing our questions back to the OPB or not answering at all.

When it was his turn to present his department’s budget, the OPB director declined to respond to questions about other departments’ cuts. The unvarnished truth is we haven’t raised the $550 million in fresh revenue to cover the teachers’ first raise.

Halfway through this fiscal year, we collected just $65 million more revenue than we did for the same period in the previous fiscal year — before the raises went into effect.  

While I deeply appreciate the job our teachers do on a daily basis, I am having some heartburn over the Governor’s request that we come up with another $2,000 pay raise for them this year. This second raise would require an additional $350 million in revenue.

 But since revenues, at least at this point, are not growing fast enough to cover the two raises, spending in other departments would have to go down to keep the budget balanced.

 There would have to be furlough days for some state employees, essential services would have to be cut back or eliminated, and vacant positions would be eliminated. Understand that many of those vacancies are in agencies where turnover is north of 30 percent.

We also don’t know how long those budget cuts would have to be in place, because it could take a number of years for revenues to grow enough to cover the nearly $1 billion cost of the two permanent teacher raises.

And if we cut staffing and services in the other departments now, where will we make adjustments if the U.S. economy dips into another recession?

I am one of many legislators concerned about what we heard during last week’s hearings. At this point in the process, all I can say is everything is on the table. 

Can we afford a second teacher pay raise? Can we afford a second income tax rate cut the legislature has hoped to implement during this session?

 I simply don’t know.  

The House Appropriations Committee and each of its subcommittees in the coming weeks will drill down in great detail both the basis for the OPB’s new revenue projections and its recommended spending cuts.  

And at the end of this process, I promise you that the General Assembly will meet its Constitutional responsibility to pass balanced budgets.