Horizon, Host: Ted Simons

May 12, 2009


Host: Ted Simons

Legislative Leaders

  |   Video
  • Senate President Bob Burns and House Speaker Kirk Adams talk about legislative issues, with the budget being the top and just about the only issue addressed this session.
Guests:
  • Bob Burns - State Senate President
  • Kirk Adams - State House Speaker
Category: Legislature

View Transcript
Ted Simons:
Good evening and welcome to "Horizon," I'm Ted Simons. State lawmakers pushed ahead last week on a budget for next year. And tomorrow lawmakers will meet to come up with a solution to a $650 million hole in the current year budget. Legislative leaders and the governor have agreed to fix the 2009 budget by Friday to meet a school payment deadline. Schools are not happy about the balances but the chairman of the Senate Appropriations Committee says School Districts are keeping more money than they should. Here to talk about the budget solution and other issues are Senate President Bob Burns and House Speaker Kirk Adams. Thanks for joining us.

Bob Burns:
Thank you.

Kirk Adams:
Thank you.

Ted Simons:
You got together with the governor to figure something out, huh?

Kirk Adams:
Well, revenues have continued to decline for the current fiscal year. We fixed the budget hole that was present in January, and since that time it slid another $650 million. We are in a position to gather together enough votes to put together a package to resolve the current fiscal year deficit, still at $650 million, bringing the total deficit for fiscal year 2009 higher.

Ted Simons:
Let's start with the idea of using money raised by school districts. I know there's a lot of concern about this. Why is it right to take that money?

Bob Burns:
Well, we're not really taking that money. What we're doing is giving the districts the authority to spend money they currently do not have the authority to spend. They are allowed to keep up to a 4% cushion, if you will, in their spending authority. If their tax rates are high enough, they end up collecting more than what the authorization is to spend. So that's what's happened in a number of districts. There are a number of districts that have these rather significant balances over and above their authorized spending limits. So what we've decided to do is to give them permission to spend that, which means that its money collected from the district. It'll be opinion spent in the district for the purpose of educating the students in that district. And so that would be used as an offset to our problem of the budget deficit that we have. But the money is local money; it'll be used in the local districts.

Ted Simons:
Is that how you see it, as well? The districts are saying this is stuff that we've raised and saved for a variety of reasons. It's pretty much intended for certain things, not necessarily for the general fund.

Kirk Adams:
There needs to be a certain amount of protection for those encumbrances that they may have, perhaps debt service. Some of the smaller districts will be excluding the federal impact aid. This proposal does everything it can do to cause as little harm as possible. Again, these are dollars above the 4% threshold, dollars they currently do not have the ability to spend because they lack the authority to do it.

Ted Simons:
Yet they say they raised them through local property taxes. Should they not be able to hold on to that money in case other costs come along that they need to spend it on?

Kirk Adams:
Certainly that's the case that they are making. In state government we are facing a massive deficit that has continued to grow. We have to ask ourselves, is it prudent to use existing balances, existing accounts, before we go to a method of borrowing. We think it is a more prudent method.

Ted Simons:
These are things they have raised on a local level, and while "taken" may not be the word, certainly swept away.

Bob Burns:
I think swept is the wrong term, because it isn't taken from them. It's still used in that district. And there is funding that's available there for these long-term purchases. They can accumulate a certain amount of dollars for capital. The money we're talking about is money they do not have the authority to spend without authorization from the legislature. So what we are doing is giving them the authorization to spend this money that they have collected from the local taxpayers in their local schools.

Ted Simons:
There's also a concern, I know, among school districts, if they don't have a heck of a lot of money or less than they would have ordinarily have, bond ratings go up and it eventually costs them more in the long run. Make sense?

Bob Burns:
I'm not sure I understand the connection. Those schools that do not have a balance will be covered because there is currently a $330 million payment due on the 15th of this month that would have to go out to the schools. That payment would be problematic for the very reason that we are at about a $7 million balance in our state treasury. One of the provisions we're trying work here is we're trying to protect the treasury at the same time we're trying to do the least harm to the schools. Whatever these numbers are in the balances, those balances would be drawn down. What is not covered by the balances, if there is a school without a balance, for example, the $300 million we would be rolling forward, again, another rollover, that money would be available to cover any school district that had a -- basically a zero balance. So we believe the least harm -- it's a way for the school districts to participate in the solution to this very serious problem that we have.

Ted Simons:
Are you concerned that this money from school districts, using this money might not be legal?

Kirk Adams:
No, we don't have any concerns with the legality of it nor concerns with the technical implementation of it. We believe both those things are not only very doable, but are certainly within the legality.

Ted Simons:
What about the cities and towns? I know this is coming out of another panel, not talking 2009 but the budget coming out of the house appropriations panel committee. That was used, as well, taking money from impact fees on a voluntary aspect. First of all, explain what we are talking about here and if this is a legal challenge.

Kirk Adams:
If we were to include the impact fees in a final budget package on the floor, I have no doubt that there would be a legal challenge. That being said, there are many legal challenges to a lot of things that we do. That's nothing new. We believe that, again, here are dollars that are not being used currently. And to the extent that we can use those dollars without dramatically impacting services, that is preferable to borrowing new dollars, if you will. Whether or not this component stays in the final package has yet to be determined. Because this is a process, as you know. The budget that gets out of appropriations committee is not necessarily the same budget that gets 31, 16, and 1, as we like to say.

Ted Simons:
Your thoughts in general on what came out of this committee.

Kirk Adams:
I think it's an excellent start. There are many components in that that we believe need to stay in the budget in order for us for A, have a balanced budget, and have the necessary votes to get it through. This happens all the time. The appropriations committee members develop a budget, it goes through the appropriations committee and then to the floor of the House. We have been working in conjunction with the Senate. There's a lot of similarities. There are very few dissimilarities between the Senate's approach and the House's approach. We continue to work jointly with the Senate. So this, again, it's part of the natural appropriations process. Now, in recent years people are used to seeing a final package that gets rolled all the way through in a single day, and votes are lined up in advance. That's not the way it's worked this year. We are facing an historic crisis. We talked about earlier the 2009 fix, revenues continue to decline. Even in good years, even in good years the legislature in recent times has been there towards mid to end of June. So it requires patience. It's a difficult time, but we continue to work through the process.

Ted Simons:
From a distance, what you saw come out of house appropriations committee, your thoughts.

Bob Burns:
Well, it wasn't a very long distance; it's a pretty short walk across the mall. We were aware of what they were planning to put through the appropriations committee. We're going to work it slightly different, at least current planning puts us at a slightly different method. I want to be sure that we have the votes before we move it out of the appropriations committee. So we're currently negotiating a package that the Senate has, which is very similar to what the House has. We're negotiating those differences. Once we have those differences worked out, we will have to make another pass through our respective caucus members to determine whether or not we have the 31 and 16 votes.

Ted Simons:
You mentioned differences and concerns. What's major? What do you see as the biggest potential stumbling block?

Bob Burns:
Well, we have what we've been working off of is a spreadsheet, which is basically your line item number values of each and every agency or program or whatever. We also have the budget reconciliation bills, which are bills that, if you make a change in the budget, sometimes you have to have language in order to make that change work. So that becomes the budget reconciliation bill. You can also use a burb, as we refer to them, to make certain policy changes to that would affect how the spending works. You can go so far as to establish absolutely new policy through a burb, through the policy process. The Speaker and I have tried to basically narrow it down to the point where it refers basically to a line item in the budget. If it's a burb it needs to refer to the line in the budget. We have a number of members that want to go beyond that. So that's part of what we have to negotiate out. We have to be able to satisfy 31 and 16 in this process. And so we have to be careful that we satisfy one on this side, we don't lose one on this side.

Ted Simons:
I was going to say, in the House are you seeing a little bit of hesitation on either end of the spectrum here? How close are you to getting this out and getting your caucus to unanimously approve this?

Kirk Adams:
We're getting closer every day. Again, this is a process that we're working very hard. We've been working it very hard for a couple of months now. There are concerns about what burbs you include. What budget reconciliation bills you include in the budget, what you don't include, what should run as a separate stand-alone bill? On the whole, especially with the line item cuts, the house and Senate have very few items that are not similar or safe. We will continue to work through this process and also work with the executive to ideally find a budget that the House and Senate and the executive can agree upon.

Ted Simons:
I think I've read reports that you are starting to reach out more to Democrats to get ideas, to get cooperation. First of all, are those accurate reports? Do they indicate that you may not have enough votes within the caucus?

Bob Burns:
I guess I've made comments publicly in that regard, but it's not an accelerated request, if you will. I meet every Monday with the minority leader in the Senate. We sit down and have a little chat about how things are going and what might be upcoming. I have made the request that, if the minority party members have issues they want to see in the budget, they ought to come and see me and we can talk about those and see if there's something that fits. I haven't had too many of those conversations, however, at this point.

Kirk Adams:
If I might add to that, as well, I continue to ask the Democrats in the House of Representatives to present me your proposal, your plan for balancing this budget. I think it's important that we know what they would do and identify if there are any areas of common ground. To date, yet, we have not received from the house Democrats a balanced budget proposal. I look forward to receiving that, though, because we need to identify what common ground there may be and act accordingly.

Ted Simons:
As far as timetables are concerned, and again, the moratorium in the Senate for a hearing acting on anything other than a budget bill, how is that affecting what you're doing in the House?

Kirk Adams:
Well, in the House we haven't been frankly affected too much yet. We've heard all the House bills already, and we've just begun the process of beginning the third read, final read on a few bills and sending them over to the Senate. We do have some concern as to how long the Senate will go without hearing bills. But I will say that the Senate is a different body from the House. Senator Burns, President Burns has every right to operate his body in the manner he sees fit. We think there are some very important pieces of legislation, partisan and nonpartisan that have to get done, they need to be done before we sine die.

Ted Simons:
We have about 30 seconds left. Are you concerned that once the budget is done, all you-know-what's going to break loose because everybody's going want to have their bill heard.

Bob Burns:
I would suspect there would be some of that.

Ted Simons:
Gentlemen, good to see you both, thanks for joining us on "Horizon.

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