Senate Bill 1246 cut
Here's the problem: Both bills relied on triggers whose implementation could ensure enactment of one law delayed enactment of the other.
Under SB 1246, the top income tax rate will fall to 5 percent if the total general revenue fund estimate for the 2016 budget year is greater than the original estimate for the 2014 budget year. Under HB 2642, additional education funding was earmarked only if the amount going into the general revenue fund increased by at least 1 percent compared to the highest final estimate from the prior year.
If the tax cut was enacted first, general fund collections would be reduced under the static analysis favored by state budget writers. This would have meant the education earmark was less likely to occur. But if the education trigger was pulled first, less money would go into the general revenue fund, making it less likely the income tax cut would take effect.
"I don't know how the
There were other problems.
"That 1 percent growth trigger: I went back to 2002 and found the numbers that they would use to calculate it," Blatt said. "In the last 12 years, there were only seven that we had 1 percent growth." As a result, Blatt noted it was unlikely that the education bill would generate the extra money projected for schools within 10 years. And while the education bill was touted as providing
Similarly, tying the tax-cut trigger to the 2014 revenue projection is problematic since the estimate proved far higher than actual collections. Year-to-date, fiscal 2014 general revenue fund collections are
Initially, both bills sailed through
We'd like to think lawmakers finally read both bills and realized they were poised to pass counteracting provisions. If not, then state government financial planning is in worse shape than we thought.
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