A constitutional backstop budget is a good idea

Divided government can have benefits. Why not eliminate the worst conceivable detriment?

State Sen. J.D. Mesnard has proposed a constitutional amendment (Senate Current Resolution 1034) making a status quo budget the default if the governor and lawmakers fail to agree on a new budget before the start of the state’s fiscal year. It’s a good idea.

The problem with the status quo budget GOP lawmakers passed at the start of this session, and Gov. Hobbs vetoed, wasn’t the concept. The problem was two-fold.

First, the timing. The so-called skinny budget the Republican majority sent up wasn’t a fallback after a good faith effort to negotiate a compromise with Hobbs. It was a bad faith political gimmick designed to set up Hobbs to take the blame if negotiations stalled out and there was a state government shutdown.

Second, it wasn’t really a status quo budget. It included the continuation of some supposedly one-time spending items but not others. It was an attempt to quick pitch on some GOP spending priorities without negotiating with Hobbs regarding hers.

The fallback status quo budget in Mesnard’s proposed constitutional amendment is more narrowly defined. If a new budget wasn’t passed before the start of the fiscal year, the previously approved general appropriations bill would remain in effect, with a couple of exceptions. The Joint Legislative Budget Committee would remove one-time expenditures from the continuation budget and increase formula funding, principally for K-12 education and Medicaid, to account for enrollment growth and inflation.

There is some lack of clarity in the current language regarding these adjustments. The adjustments are to be made by a majority vote of the committee, which implies some discretion regarding them. However, the constitutional amendment says that the adjustments “shall” be made, indicating that they are mandatory.

This ambiguity is particularly consequential regarding the removal of one-time expenditures. Would the JLBC have to remove all one-time expenditures? Or could the committee pick and choose among them? The latter is what GOP lawmakers did with their vetoed skinny budget.

The current budget has a whopping $1.1 billion in what was labeled “Operating One-Time Spending.” The vetoed skinny budget included $484 million in such spending. 

If there is to be a constitutional backstop budget such as this, the legislature will need to get much more careful and honest about the division between ongoing and one-time spending. In an effort to make future structural balance calculations look better, some recurring expenses get designated as one-time.

A good example is building renewal grants for major repairs and maintenance for district schools. Each project is one-time. But the need for such projects is recurring. The current budget categorizes most of the building renewal grant money as one-time. But GOP lawmakers nevertheless included all of it in the vetoed skinny budget. 

Another good example is technology fixes and upgrades. Each project is one-time. But the need for technology fixes and upgrades is recurring in state government.

While these technicalities are important, the big picture benefit is worthwhile even if the ambiguities and details aren’t perfectly resolved.

SCR 1034 passed the Senate on a party-line vote, with all the Republicans supporting it and all the Democrats in opposition. The Democratic opposition is based upon the belief that it is an attempt by Republicans to avoid negotiating in good faith with Hobbs on budget matters. 

That may, indeed, be part of the motivation. But that won’t be the result. And there are good governance benefits that exceed short-term political calculations on either side.

Some Republicans are always going to want some more spending on some things. Republicans are always going to want some measures signed into law that a Democratic governor may not like but don’t really give her heartburn. And some Republicans are always going to want to cut some tax or other. The latter isn’t formally part of the appropriations bills but inevitably becomes part of budget negotiations.

Even with a backstop budget in place, there is ample incentive for both sides to give negotiations for something better a try. And the governor would retain ample leverage in such negotiations without the threat of a government shutdown looming in the background.

The threat of a government shutdown is inappropriate and dangerous leverage for either side to wield. The state would be better off extinguishing the threat, as SCR 1034 would give voters the chance to do.

My guess is that we are probably entering into a protracted period of shared power between the parties in state government. That increases the probability of partisan tensions and the possibility of serious and consequential political miscalculation.

There can be benefits from divided government and shared power. The worst conceivable detriment would be a state government shutdown. Removing that as a possible outcome would be a prudent reform.

Reach Robb at robtrobb@gmail.com.