Wednesday, February 20, 2013

Busy Day Dominated By Transportation Compromise

The Senate rejected the House amendments to HB 1999, and requested a committee of conference.  This is the grade-the-school A-F bill.

 HB 2096, the takeover of underperforming schools bill, went by for the day in the Senate.

The big news of the day was the conference report on HB 2313, the transportation bill.  I am going to restrict coverage to the narrow issue of the impact of the conference report on the General Fund (GF).  Thirty percent of the General Fund now goes to public education, so any "take" from the GF for transportation is of great concern.

What is the impact on the GF?  The answer is complex, as the bill giveth, and the bill taketh away. 

The take from the GF over 5 years (2014 to 2018) is 699.1 million.  About $209.2 million of this would go to public education.

The bill dedicates an additional 1/8th of the existing general sales tax for education.  This equals $578.3 million over 5 years.

If the Marketplace Equity Act (MEA) passes on the Federal level, an additional $344.5 million is earmarked for public education.  My understanding is that this is a huge IF.

If the MEA does not pass shortly, public education loses out on $59.3 million in 2014 and $67.3 million in 2015.

If MEA does not pass by January 1, 2015, the gas tax will be raised and the GF diversion to transportation is reduced to $40 to $70 million.
It is going to be interesting to see if this bill, which does increase taxes, will pass the House.  I suspect that it will pass the Senate.  The bill will raise $880 million a year for transportation when fully implemented in 2018.

The Senate took of SB 1374, Senator Alexander's constitutional alternative to SB 1324, which addresses underperforming schools, passed the Senate on a 32-7 vote.

The House passed SB 1324, the state takeover bill, 64-34, but remember from yesterday’s post, the Senate put “the clause” on the bill.  If it is not funded in the final budget, it will not go into effect.