The Free Press, Mankato, MN

State, national news

April 23, 2014

Lawmakers jockey over budget surpluses

WASHINGTON — Less than 24 hours after the University of Kentucky men’s basketball team beat cross-state rival Louisville to advance to the Sweet 16, Lexington Mayor Jim Gray asked state lawmakers for $80 million to renovate Rupp Arena, the iconic building where the Wildcats play. He didn’t get it.

Democratic Gov. Steve Beshear also called on the legislature to pass the arena funding, along with more money for K-12 education, pre-school, transportation, infrastructure and some targeted tax cuts. The tax cuts and education and transportation funds were approved. But the budget passed by the politically divided legislature also cut spending by 5 percent for many state agencies and left others flat. Rupp Arena did not make the cut, though the governor and mayor have pledged to try again next session.

The Kentucky experience illustrates the trade-offs and competing interests facing states with surpluses. Forty-two governors recommended higher spending for fiscal year 2014 than the year before, according to the National Association of State Budget Officers (NASBO). The organization expects budgets to be as large, or larger, in fiscal 2015.

As state revenues continue to recover from the Great Recession, the most pressing question in many state capitols is which cash-starved projects and priorities should get the extra money.

Many states have used it to pay for priorities like education (Arizona, New York) and transportation (Maryland). But some calls for state expenditures were rejected. State government workers in Tennessee, for example, requested a pay raise but didn’t get it. Neither did teachers in Alabama.

As long as the cash flow remains positive, states can expect to face pressures about how to use the money. For example:

In Nebraska, Republican Gov. Dave Heineman cited some wins and some losses in an interview at the end of the 2014 legislative session. He blocked a Medicaid expansion under the Affordable Care Act sought by lawmakers. But he lost an effort to provide $500 million in income tax cuts; instead, the legislature opted for $412 million in targeted tax cuts over five years. And state lawmakers overrode some of his vetoes, restoring money for improvements to the state capitol, state park maintenance and job training.

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