Fitzsimon File

Both the House and Senate are scheduled to convene Friday morning just after midnight to give final approval to a continuing budget resolution to keep state government running for another 30 days while negotiators iron out a final budget agreement.

Thursday brought news that House and Senate leaders are extremely close to a final agreement on taxes and a plan for the state to takeover the full cost of Medicaid, ending the requirement that counties pay for part of the program.

The only possible remaining stumbling block is the Earned Income Tax Credit. The House has been insisting on a 5 percent refundable credit that could help as many 825,000 low-income workers. The Senate leadership initially insisted on a non-refundable credit, which would only help 150,000 people and provide nothing for many of the poorest workers who qualify for the refundable credit.

Reportedly Senate leaders have now agreed to the refundable credit, but there still may be a catch. Some Senators want to cap the cost to the state of providing the EITC, meaning that the actual credit could be less than 5 percent.

Let’s hope House negotiators have the sense to reject that suggestion. If the agreement is for a 5 percent refundable EITC, then that is what people who qualify for the credit should get. There is no cap on how much reducing the income tax on the wealthy can cost, and lawmakers keep claiming that the two tax changes offset each other.

Assuming that the agreements on taxes and Medicaid hold, lawmakers’ attention now turns back to the spending portion of the state budget that has all been forgotten in the last several days.

The recent news that the state has $256 million more in revenue than expected combined with keeping the sales tax on the books ought to mean that the final budget can make larger investments in education and human services than either the House or Senate proposed without resorting to budget tricks or creating holes in future budgets.

The House budget makes bigger investments in most areas than the Senate plan and should be the floor for budget leaders, not the ceiling. Expanding children’s health care and funding dropout prevention programs beyond the House budget would be good places to start, as would adding to the House proposal for $15.5 million in the Housing Trust Fund.

The Senate allocated $10 million for the Disadvantaged School Supplemental Fund to help poor school systems. The House wanted to spend $20 million. Combining the two would be a wise investment. 

Neither the House nor the Senate budget gives school systems back the sales tax refund on most purchases and the schools need it, which should make it an easy call for politicians who continue to say that education is their top priority.

There are plenty of other important investments for lawmakers to make that would actually save the state money and help thousands of people, like dramatically expanding drug courts and other prison alternatives to keep nonviolent offenders out of prison and able to pay restitution to their victims while the offenders get treatment for their addictions.

They could take thousands more children off the waiting list for a child care subsidy so their mothers could go back to school to learn skills that could help the family out of poverty.

 

The list is a long one and no one expects lawmakers to solve every problem this session. But we ought to expect them to make a significant down payment on addressing most of them. The wealthy are getting their tax cut. Let’s now invest in services that help families who are struggling improve their lives.

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This entry was posted on Thursday, June 28th, 2007 at 5:29 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.