The Political Notebook 2.3.23
The skinny budget isn't a true status quo budget; how not passing an AEL exceedance could put Democrats in charge of the legislature.
At some point, passage of a status quo state budget could be a responsible thing for Republican lawmakers to do. But now is not that point. And what Republicans are cramming through isn’t a status quo budget.
Let’s begin with the latter observation.
The legislature plays a budget game with what is called a structural balance, defined as the relationship between ongoing revenues and ongoing spending – an attempt at examining sustainability.
However, over the years, budget documents have increasingly categorized recurring expenses as one-time, thus excluding them from the structural balance calculation and making it artificially healthier.
Despite how GOP lawmakers are describing it, the so-called skinny budget isn’t a status quo budget – what was spent last year plus whatever increases are required by law, most significantly for K-12 education and Medicaid.
In the current budget, there is $1.1 billion for what is described as “operating one-time spending.” In the skinny budget, there is just $484 million.
Operating expenses are rarely truly one-time. So, the skinny budget includes some discretionary decisions about what current operating funding gets continued and what does not – precisely the sort of thing budget deliberations and negotiations are supposed to be about.
Some of it is pretty weird. The current budget spends $200 million on building renewal grants for district schools to fund major repairs and maintenance projects. But only $17 million of that is treated as ongoing spending in the budget. The remaining $183 million is labeled as one-time.
The state is being sued for allegedly shortchanging schools on capital funding. Perhaps as a result, the skinny budget for next year includes the supposedly one-time $183 million being spent this year, but still labels it as one-time. That means it disappears from budget projections for future years, even though clearly this is a recurring expense.
Other recurring spending that would be part of a true status quo budget didn’t make it into the skinny budget, even for one year.
It may be that there is no agreement to be had on the state budget between Gov. Hobbs and GOP lawmakers, and no political room for GOP leadership to countenance a budget passed principally with Democratic votes. If such a stalemate were reached after a good faith effort to negotiate by both sides, a true status quo budget might be the best way to avoid a government shutdown.
A true status quo budget would be different, and higher, than the skinny budget. However, by cramming through the skinny budget, GOP legislators are poisoning the well for a true status quo budget as a last minute maneuver to avoid a shutdown. It makes it less likely that Hobbs and Democratic legislators would accept one when the time becomes more ripe.
GOP legislators say they are trying to avoid a government shutdown by passing a skinny budget. In actuality, they are making one more likely.
If the GOP legislature doesn’t approve an exceedance from the constitutional aggregate expenditure limit so school districts can spend the money that has been appropriated, the consequences for the schools will be catastrophic. But what will be the political fallout?
The following scenario is far-fetched, but not impossible: selective recalls give Democrats control of both chambers of the legislature.
There are five legislative districts in which both a Republican and a Democrat were elected to the House. There are three Senate seats held by Republicans in a district that elected a Democrat to the House. Democrats would only have to win a recall election in one district to deny Republicans majority control. Two wins, and Democrats take over.
Causing massive shutdowns and chaos at the end of the school year might be a big enough blunder that the recall elections could be single-issue referendums. And it might not be enough to save targeted Republicans that they were willing to support approving the exceedance without conditions. Republicans are in charge of the legislature. Voters might see collective guilt for failure as a reasonable proposition. And putting Democrats in charge as a condign remedy.
The Republicans wanting to hold the AEL exceedance hostage to other things would attempt to shift the blame to Democrats for not going along. That argument would get entirely lost in the tumult howling from the schools.
Republican lawmakers have no idea how explosive the lit stick of dynamite they are holding really is.
Reach Robb at email@example.com.