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Sponsor Statement for CS for SB 182
Pro Rate Reductions in Benefit Programs

Reducing certain payments to ensure continued payments for an entire fiscal year when funding at the statutory designated level is not appropriated.

Committee Substitute for Senate Bill 182 rprovides a valuable budgeting tool to executive branch program managers by allowing them to reduce payments on a pro rata basis when necessary. Currently, most statutes require that payments be made at a prescribed level without reference to funding actually available in the budget for that year. If a program does not receive funding at the statutorily suggested level, the only current option is to request a supplemental appropriation or shut a program down in the later months of the fiscal year.

Committee Substitute for Senate Bill 182 recognizes the reality that funds may not always be available to fund individual benefit payments at the statutorily suggested level. If this occurred, individuals who rely on these programs may receive benefits only until the available money runs out for that fiscal year. This legislation provides a contingency in the event that a funding shortage occurs in the future.

Committee Substitute for Senate Bill 182 would allow program directors to reduce benefit payments on a pro rata basis should funding for that program be insufficient. This legislation would require pro ration when so directed by legislative intent in the budget.

While this would reduce each payment, it would extend payments over the full 12-month period, thus allowing the Legislature and Administration to respond to reductions in revenue and increases in program recipients in a simple and practical manner. This bill specifically excludes loan programs, subsidies for hard-to-place children, retirement programs and programs for which other provisions of law address underfunding.

This legislation will encourage greater accuracy and accountability in state budgeting and also encourage accountability on the part of program directors for the efficient management of their program. The mechanism is similar to other state programs that provide benefits based on funds available.

Committee Substitute for Senate Bill 182 provides a reasonable budgetary tool for the administration and legislature and a valuable mechanism that may be needed to help deal with future fiscal challenges.

DD/bc

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