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House Finance outlines package of fee increases and cuts to close $770 million gap
Summary
House Finance leaders told the Senate Finance Committee they closed an estimated $770 million shortfall versus the governor's proposals largely through fee increases, targeted cuts and use of the rainy-day fund; the plan keeps most education adequacy funding intact while moving some lottery revenue and changing several dedicated-fund flows.
Representative Ken Weiler, chairman of the House Finance Committee, told the Senate Finance Committee that the House confronted an estimated $770 million gap between the governor's budget and the House ways-and-means revenue estimate.
"We were handed the governor's proposal. We put HB 1 and our other bill. We put HB 2 on it and filed them and then took a look at them and waited for the ways and means committee to come back with revenue estimates," Weiler said. He and other House members described a mix of revenue adjustments, program cuts and transfers intended to close the difference while moderating impacts on core services.
House leaders said they relied heavily on a set of fee increases and targeted dedicated-fund adjustments rather than broad new taxes. Representative Dan McGuire, chair of Division 1 on the House Finance Committee, said increases included vehicle-registration and vanity-plate fees, several fee increases in fish-and-game and department-of-agriculture fee changes, and an assessed 5% administrative charge on some dedicated funds. McGuire said Judicial Branch fee increases were expected to add roughly $5.4 million to the biennium.
To reduce spending, House Finance applied back-of-the-budget reductions across many agencies, froze certain positions and deferred some capital and contract outlays. The House also moved some lottery and video-lottery-terminal (VLT) receipts into a restricted account earmarked for public education, and changed the split of several business-type taxes so more receipts flow to the general fund (a 70/30 general-to-education split rather than the governor's proposal).
The House plan assumes a draw from the state's rainy-day fund in the 2025 fiscal year and then a partial replenishment: Representative McGuire said the House projects reducing the rainy-day fund in 2025 and adding back $85 million by the end of the 2026–27 biennium. "On day one of this budget, the rainy day fund is being decreased to $143,700,000," McGuire said when summarizing the House surplus statement.
House members repeatedly said they tried to target fee increases at places where impacts would be small for most residents — for example, raising the vanity-plate fee to $60 was listed as a modest revenue source — and prioritized maintaining education adequacy funding and core human-services obligations.
The Senate Finance Committee will now review the House package, reexamine revenue estimates for FY2025 and consider amendments during its markup. Michael Kane, legislative budget assistant, briefed the committee on the surplus statement and emphasized that the Senate's revenue estimate for FY2025 will determine the single largest variable in any final package.
