Members of the house grew uneasy last week as they voted a routine final “deficiency” budget — a set of appropriations to cover a short list of cost overruns from the last fiscal year.
The good news was that the overruns could be covered by surpluses in other accounts, so the bill mostly moved unspent appropriations (spending authorizations) from accounts in surplus to accounts in deficit, rather than appropriating any new money.
In addition, for a few accounts with surplus, the bill continued last year’s appropriations to the present fiscal year. Normally, surplus appropriations in an account permanently expire on June 30 at the end of the fiscal year. A “prior appropriation continued” makes any surplus available for expenditure in the same account in the next fiscal year. This is referred to as “PACing forward” the account. In an account that has been PAC’d forward, the amount available for expenditure equals the amount PAC’d forward from prior fiscal years plus the amount appropriated in the present fiscal year. At the end of year, that total, less any expenditures from the account, can be PAC’d forward again.
Among the accounts that we PAC’d forward were those “with a secretariat code of 01”. This code refers to the group of accounts which pay for the operations of the House and Senate. For many years, it has been routine to PAC forward all legislative appropriations. The appropriations PAC’d forward are available for expenditure by the legislative leadership without further approval from the membership or from the Governor. They can be used for any purpose, including payroll, as well as capital purposes like computer or telephone systems.
The amounts in question totalled just over $30 million at the end of 2006 — substantial compared to the total legislative operations budget of just under $60 million. Because legislative operation expenditures roughly equaled new moneys appropriated in 2007 and 2008, the amounts PAC’d forward in 2007 and 2008 were also roughly $30 million. Last year after the Governor made 9C cuts, the legislature contributed to resolving the fiscal crisis by releasing roughly $12 million in PAC’d funds, so the amount that we voted last week to PAC forward was a little under $19 million. This included a $4.8 million surplus in the House Operations account, $5.0 million in Senate Operations and $8.9 million in Joint Legislative Operations.
In the final budget for Fiscal 2010, the House operations line item appropriates $30.3 million, well below the amount actually expended in Fiscal 2009, which was $33.7 million. This amount was almost entirely spent on salaries and benefits. Given a typical 4% inflation in salaries and benefit costs, the amount necessary to maintain the current staffing levels in the House would be $35.0 million. In other words, the $4.8 million PAC’d forward will just cover the gap between the amounts appropriated for 2010 and a level-staffing run rate in 2010. So, although members voted generally understanding that the PAC’d funds would serve reserve and capital purposes, and this has been true in prior fiscal years, this year, the PAC’d funds are essential to maintaining operating staff levels.
The possibility of use of these funds for payroll was precisely what made members uneasy. As we make deep cuts in lifeline human service programs and critical local services, we want to know that we are running a lean operation ourselves. The numbers available don’t give us confidence that we are doing that. Legislative operations expenditures in Fiscal 2009 topped $60 million, 4% above 2008 spending. To keep that in perspective, it’s only 0.2% of the state budget and is not much above the Fiscal 2002 actual spending. Recent legislative operations spending bottomed at $50 million in 2004, built back up to current levels in 2007 and have been roughly stable since then. But when other programs are being eliminated or cut deeply, a maintenance budget doesn’t feel right.
Managing legislative staffing is one of the most sensitive and difficult challenges that legislative leaders face. Legislative staffers have close relationships with the legislators that they serve and legislative leaders depend in turn on the support of their members. There is an invisible web of loyalties old and new that bind the legislative staff in place even as members come and go and move around. When leadership changes, members with large responsibilities who have substantial staff often lose their responsibilities but keep their staff.
Long term legislative staffers include some of the most important people in the building, possessing invaluable institutional knowledge. New staffers are bright, dynamic, idealistic young people with a willingness to work for wages in the low $30K range (well below the average wage in the state). All members understand their absolute dependence on the support of their staff. There is nothing more emotionally difficult for legislators to talk about than legislative staff payroll.
I voted for the deficiency budget based on representations from senior leadership staff that, in the very near future, we will start that conversation and make some difficult decisions.