Democrats’ Budget Spends More than the State Takes In

On Thursday, February 2, Senate Democrats released partial targets for the FY 2013 budget. Unlike the proposals by the Governor and House and Senate Republicans, in the Senate Democrats’ blueprint, ongoing spending exceeds ongoing revenue.

House and Senate Republican budget targets appropriate $6.059 billion from the general fund and $106 million from the Health Care Trust Fund (HCTF). The Governor appropriates $6.244 billion from the GF and $106 million from the HCTF. (The $106 million is the same amount for the HCTF as FY 2012.) Both of these amounts represent a figure that is lower than ongoing general fund revenue.

The Senate Democrats appropriate $6.218 billion from the general fund. While this appears to be $25 million less than the Governor, in reality it is $88 million more than the Governor because the Senate Democrats recommend taking an additional $113 million of tobacco tax revenue and transferring it to the HCTF. The transfer reduces ongoing revenue from $6.251 billion to $6.134 billion.

*This is the amount the Governor and House / Senate Republicans are under the ongoing revenue. The Senate Democrats’ budget plan spends $84 million more than ongoing revenue.

House Republicans have three budget principles. First, the budget cannot spend more than the state takes in. Second, it should not use one-time money to balance the budget. Finally, it cannot purposefully underfund entitlements like Medicaid and commitments like the property tax credits.

The Senate Democrats’ budget violates the first budgeting principle. Therefore, House Republicans will insist that the final budget spends less than ongoing revenue.