Last Thursday the House held their final debate and vote on the budget bill. One Republican and one Democrat crossed party lines on the vote and the budget passed the House 77-40. The Senate will vote for concurrance on the bill tomorrow, Tuesday, June 18th.
If the Senate does not vote in favor of the House’s changes, which is expected, then a group of Senators and House members will be selected and appointed to a Conference Committee. This small committee of members from both chambers will discuss the differences in the bills and come to a solution.
In preparation for that discusssion, the John Locke Foundation has done a study on a possible strategy for conferees. Traditional logrolling is a budgeting technique whereby spending items favored by each legislative chamber are accepted by the other during conference budget negotiations in a sort of trading of favors that results in gradual increases to the overall budget. This study reverses that practice by accepting the lower of the two chambers’ previously approved figures for each department, as well as the higher of the two chambers’ previously approved fund transfers. This is referred to as "Reverse Logrolling."
A reverse logroll for the 2013-15 budgets would greatly benefit taxpayers. Although many (including John Locke Foundation analysts) would continue to disagree with elements of the resulting plan, it would produce a General Fund budget of $20.6 billion in the first year and $20.8 billion in the second year of the biennium, leaving approximately $594 million in surplus in the first year and more than $940 million in the second year without tax reform adjustments.
Discussions of the FY 2013-14 biennial state budget have focused on many drivers; the two largest are the Medicaid shortfall and tax reform. Both the Senate’s and the House’s proposed budgets have had to deal with a growing Medicaid shortfall, necessitating cuts to other agencies in order to meet the growing demand of Medicaid. When the Governor released his budget proposal in late March, the shortfall was around $123 million. By the time the Senate and House had proposed their versions of the budget in early and late May, the shortfall had reached more than $300 million. In addition to Medicaid, each legislative chamber has also proposed its own tax reform plan, which has adjusted available spending to the departments in each proposed budget.
Taking into consideration the proposed tax reform packages from each legislative chamber, there are different outcomes and possibly the opportunity to change details within the plans if a reverse logroll is used for budget spending. The result from the Senate tax plan would yield $851 million in surplus over two years, while the House plan would generate over $1.1 billion. This shows that, even with significant tax reform changes and the large Medicaid shortfall, the legislature still has many options. If budget conferees use the reverse logroll method and leave their chambers’ pride at the door, then everyone will benefit from the large surplus — taxpayers and state government alike.
If you would like to read more about the reverse logroll study, you can view the whole study here. You can also visit the John Locke Foundation’s website for an interview with Sarah Curry about the study and an in depth explanation of the calculations mentioned above.
