Energy & Infrastructure -- September 15, 2017

Budget Impasse Gets Real

On Wednesday night, the House passed HB 453, a revenue package to accompany the $32 B spending package that was enacted in July. Technically, the state has been spending money it does not have since that time.

The Governor had sounded the alarm that September 15 was a real deadline after which the short term borrowing would run out and the state’s bank account would drop to less than zero.

According to most insiders, the House passed version of the revenue package just doesn’t cut it.

The bill relies on a one time raid on reserves set aside for environmental, transportation, employment benefits, education and other funds – to the tune of $830 million.  It also involves a financing deal that borrows $1 billion against future payments from the Tobacco Settlement Fund. That “mortgage” would cost taxpayers $50 million per year for 30 years.

The Governor has called the package “nonsense.” And Senate leaders, on a bipartisan basis have basically called it dead on arrival in that chamber.

It is likely that the Senate will reject the House revenue package as soon as they return on Monday, September 18. A conference committee can then get down to the business of crafting a compromise between the House and Senate version.

The problem, of course, is that the clock is ticking.

The state is likely to stop issuing checks of any type until this is resolved.