I understand there is some concerns about
a government shutdown and possible state employees being furloughed.
However, while it is a situation we must prepare for, it is unlikely.
Contingency plans are being made if we do
get to June 30 and a budget is not in place. We may be in a situation
where the budget and education funding plans get passed by the end of
the month, but we need to take a couple extra days in July to finish
other business such as the capital budget and Hirst.
The governor indicated yesterday he would
veto any temporary budget that would keep the government running for a
few extra days until lawmakers reach a deal. Nobody wants to see a
government shutdown and we want to do whatever is possible to make sure
that doesn’t happen.
Negotiations
The education funding negotiation
team continues to meet. Progress is being made, but given the extensive
amount of detail involved, it is a difficult process. I remain positive
that we will reach a solution for the education funding plan and the
operating budget by the end of the month.
As for taxes with the operating budget,
– I am hearing there are some still on the table – the internet sales
tax and possibly adjusting the real estate excise tax. As I stated in my
last update, I wouldn’t expect a capital gains state income tax or an
increase to the B&O tax, as much as the governor would like to see
one. I am still uncertain as to whether or not they have 50 votes for
tax increases in the House, and 25 votes for tax increases in the
Senate. We do not need to increase any taxes given the amount of revenue
coming into the state.
Revenue Forecast
The Economic Revenue Forecast Council released
their latest revenue forecast on Tuesday. The revenue forecast has
been increased by $81 million for the 2015-17 budget cycle and by $87
million for the 2017-19 budget cycle. The increases are smaller than the
increases in the March forecast, but they are still positive.
While this provides some additional
dollars that may be beneficial to budget negotiations, more dollars for
the budget is not necessary. A reminder, we are expecting more than a 13
percent increase in revenue – taxpayer dollars – this biennium. Revenue
is not the issue. I am concerned about what the level of proposed
spending may be in the final budget plan. However, we will talk about
that when the plan comes out.
I urge everyone to stay optimistic. From what I am seeing, a responsible, sustainable solution is within reach.
Sincerely,
Cary Condotta
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