January 17, 2008

Putting the Brakes on Excess Spending

My state representative, Glen Casada of Franklin, has announced he will be filing some much-needed legislation to stop a long-standing state spending practice which I and many others believe violates the state constitution.

In a press release from the House Republican Caucus, Casada, who is caucus chairman, announced he would file legislation to stop "out of control" spending by the executive branch while the legislature is out of session.

"With the budget being a little tighter this year, I believe this is a good time to address this issue of out of session spending," stated Rep. Casada. "Let's set a precedent that will create fiscally sound policy for the future."

The budgetary practice works like this: When the legislature isn't in session, the governor or the finance commissioner can appeal to the chairs of both the Senate and the House Finance committees and request that certain excess funds above what is set forth in the budget be reallocated to new projects.

Neither the Finance chairs nor the legislature as a whole can reject the executive branch's proposal - it's merely a courtesy notification.

The problem with that is that it sometimes involves tax dollars, and the state constitution is crystal clear that state government is forbidden to spend a dime that isn't first "appropriated by law," and the way that must happen is that the legislature must pass legislation to do that.

Casada says the money that has been spent this way since 1999 - usually one-time monies, but occasionally recurring funds - totals more than half of one billion dollars.

A budget expansion document shows that since 1999, a total of $530,653,688 has been spent out of session.

He continued, "Spending one-time money is very different from spending recurring funds. I just want to make sure the state is being frugal so that we may head off any type of budget crisis in the future."

I first identified the "unbudgeted dollars" scheme by which the previous administration was inflating the budget several years ago, and have written about it extensively here at BillHobbs.com. Spending "unbudgeted dollars" is how the state routinely spends more each year than the legislature appropriates in the budget it passes each spring.

To its credit, the current administration responded by tightening up the definition of the kind of money it could spend through this process, compared to the previous administration which used the process to spend surplus tax revenue.

In the Bredesen administration's proposed budget for the current fiscal year, the process is described this way:

When notice of unexpected revenue is received by an agency, the Commissioner of Finance and Administration, if he wants to approve the program expansion, may submit an expansion report to the chairmen of the finance committees for acknowledgement. Upon the chairmen's acknowledgement of the expansion report, the Commissioner of Finance and Administration may allot the additional departmental revenue to implement the proposed or expanded program. ... This expansion procedure is not used to increase allotments funded from state tax revenue sources. No appropriations from state tax sources may be increased except pursuant to appropriations made by law.