We recommend that the Legislature delete Control Section 4.50 because it is not necessary to provide the Department of Finance the additional and broader authority it requests to change items of appropriation for lease-payment bonds and related costs in the budget bill and during the budget year.
This control section allows the Department of Finance (DOF) without further legislative review to change the amounts appropriated in the budget for payments and other related costs on lease-payment and lease-revenue bonds. As proposed, the section (1) displays specific amounts that the department must adjust for proposed appropriations in the budget bill and (2) authorizes the department to make unspecified adjustments in any item of appropriation, or in any category thereof, for these payments and other related costs anytime during the budget year.
Specific Changes in Proposed Appropriations. This portion of the section requires the department to make specific changes to appropriations in the budget bill. For example, the Secretary of State's budget includes two items of appropriation for lease-payment bond payments--Item 0890-003-0001 from the General Fund and Item 0890-003-0228 from special funds. These items include scheduled appropriations for lease payments and fees, insurance, and reimbursements. Control Section 4.50 then requires the department to add $5,579,000 to the General Fund appropriation, add $1,761,000 to the special fund appropriation and the increase reimbursements by a total of $7,331,000 (the distribution of the reimbursement amount between the General Fund and special funds is not shown). A similar display is provided for lease-payment appropriations for another 12 departments.
It is not clear why this portion of the control section is necessary. There is no reason the DOF when preparing the budget bill (and the May Revision) cannot show the proper amount under the respective department's budget. This is clearly the case since the department prepares both the departmental budget amount and the changes shown under Control Section 4.50.
Changes During the Budget Year. This portion of the control section authorizes the department to change any item of appropriation for lease-payment bond payments and related costs as reported by the State Treasurer's office. This authority is unnecessary. First, any cost adjustments that may be necessary for the budget year are known before the Legislature takes final action on the budget bill. The Treasurer's Office provides this information at the time the Governor's budget is developed and again at the time of the May Revision. Thus, during hearings on the budget the Legislature can review and approve, as appropriate, any changes that may be necessary in the respective items of appropriation for each department. Second, in the event there are changes during the budget year, the department has the authority under other budget bill control sections, to advise the Legislature if any increased spending authority is needed.
Recommendation. As discussed above, it is not necessary to provide the DOF the authority it requests in this control section. The Legislature can and should appropriate in the budget bill the necessary amount that each department must pay for lease-payment bonds under that department's budget. In the event costs change during the budget year the DOF has other means, elsewhere in the budget bill, of obtaining expenditure authority by notifying the Legislature and thereby providing a measure of legislative oversight. There is no need to give the department additional and broader spending authority. Consequently, we recommend the Legislature delete Control Section 4.50.