Denish: A Million Here, A Million There

Corner to Corner

Imagine this: You are a legislator in the state House of Representatives and are told that you have $2.5 million to distribute in your House district or $4.2 million in your Senate district. Wow! You would no doubt feel like Santa Claus.

This is what happened in the 2024 legislative session, and it's what happens every legislative session although amounts vary depending on the revenue sources.

Those revenue sources for the capital outlay (sometimes called pork) bill are general obligation bonds, severance tax bonds, and non-recurring general fund revenues.

The capital outlay bill in the last legislative session was a little over a billion dollars. About half ($479.7 million) of the appropriation was dedicated to state-owned projects, such as prisons, hospitals, and juvenile facilities.

The remaining $525 million went to "local" capital outlay. This is the money that goes into Santa's sleigh, divided between the governor, the Senate, and the House. The amount last year was $175 million apiece.

Narrowed down, the money gets equally divided among members in the Senate and the House chambers. Senators (42 members) received $4.2 million last session and representatives (70 House members) received $2.9 million.

No matter how you look at it, it's a lot of money.

The 16-member Legislative Finance Committee, made up of senators and representatives, was established almost 70 years ago as the fiscal management arm of the Legislature. Membership is a plum for those who serve. This committee will eventually hear the capital outlay bill. They have a full-time, year-round staff who research and prepare reports and briefs to keep the Legislature informed.

This LFC staff goes through a year-long process with other financial agencies, the higher education department, and higher education institutions to form a "statewide framework" for the money dedicated to state owned projects. The other half, for pork, doesn't get as much attention and seems less coordinated, if at all.

The LFC staff does basic training for legislators with guidelines for prioritizing requests. Even with that, there are challenges:

Lack of coordination. Ideally, a legislator would coordinate requests with local governments, mayors, or council members to see how a request fits into overall priorities. This happens on a limited basis. To please constituents, legislators sometimes fund random requests that are not priorities. As examples, I heard stories of unwanted recreational equipment, excess school furniture, and equipment being secured with no place to land. These random appropriations sometimes die on the vine or revert to the general fund.

Lack of knowledge. In rural communities, where citizens may serve multiple roles – the village manager is also volunteer fire chief or postmaster, for example – few know exactly what steps should be taken to submit a request. They may also lack technical expertise and resources for project planning.

Demand far outweighs supply. In the last session, there were requests for $3.6 billion in local capital outlay. Only $525 million, or 15%, was available. Because most legislators want everyone to have a package under the tree, they spread money wide and shallow rather than narrow and deep.

These challenges are combined with the fact that legislators don't know exact allocations until late in the session, have no regular staff to help vet requests as they are submitted, and have lots of other legislation to consider once the session is underway.

This is why there is $1.6 billion of local capital outlay unspent: No vetting, little coordination, overwhelming requests.

Meanwhile, the portal for submitting requests for 2025 will open Oct. 17. Assuming revenues stay high, here comes Santa Claus.

Denish: A Million Here, A Million There

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