Maybe it seems early to be talking about targets, but if we wait too long, it will be too late to talk about them. So, let’s celebrate the start of session with a little target tutorial.
Whether the state is facing a deficit or a surplus, legislators need to decide how much money the state will raise in revenues and how much it will spend. So the House and Senate each adopt a budget resolution that sets the overall maximum level of revenues and expenditures for the general fund (and sets the size of the budget reserve and cash flow account). This is an extremely important step because they are basically deciding the “size of the budget pie.” For example, if they set the maximum level of revenues at the same level as what’s in the February Forecast, it’s probably a signal that they aren’t planning to propose any significant tax increases.
Once legislators have set the overall level of revenues and expenditures, the available resources are then divided up between the major finance committees – and that’s what we call committee targets. Once the chairs of the various finance committees know how big their slice of the budget pie will be (these days it usually means how much money they will have to cut from their budgets), then they can do the serious work of putting together the omnibus budget bills.
If you read the House and Senate Rules, there are actually timelines for when the budget resolution and committee targets must be adopted. (Note that the House and Senate will be adopting new rules now that a new legislature is convening – I’ll let you know of any of the following information changes.)
- In the House, the Ways and Means Committee must adopt a budget resolution within 25 days of the release of the February Forecast. The House Rules include the committee targets as part of the budget resolution. The budget resolution does not need to be approved on the House floor. Once the budget resolution and committee targets are adopted by Ways and Means, all bills (and amendments to any bills) must conform to the limits or they will be ruled out of order. However, Ways and Means can amend the budget resolution at any point during the legislative session.
- In the Senate, the Tax Committee and Finance Committee must adopt a budget resolution within 30 days after the release of the February Forecast. The full Senate must also adopt the budget resolution. Then, within 14 days of adopting a budget resolution, the Finance Committee must adopt a resolution setting the committee targets. The full Senate does not need to adopt the committee target resolution. Any bills or amendments that do not conform to the resolutions are ruled out of order, although the Finance Committee and/or Senate may act to replace or amend these resolutions at any point during the legislative session.
Although much of this resolution process happens behind closed doors, it’s exceedingly important because it sets the parameters of the debate. So it’s not too early to be asking legislative leaders to adopt a budget resolution that leaves room for revenues to be part of the solution.