Senate Finance Committee discusses tax shifts, fund transfers, SGO language and fiscal impacts during two May 29 sessions
Finance — 09:55
The Senate Finance Committee on May 29 reviewed provisions in the miscellaneous tax bill that would shift revenue sources between state funds and change effective dates for tax deposit rules. Committee discussion described an intent to gradually shift all revenue generated by the motor vehicle purchase and use tax to the transportation fund in future fiscal years. The committee also considered replacing the effective date for an existing municipal share of local option tax provision, striking section 50, and adding a new subdivision to set effective dates for other changes.
Members discussed changes to the distribution of meals and rooms tax and purchase and use tax revenue. One provision would, beginning in fiscal year 2028, increase the share of meals and rooms tax deposited in the education fund while decreasing the share of purchase and use tax deposited there. A cited percentage in the draft was 29 percent for one deposit line.
Committee members described a proposal to add roughly $9.7 million for fiscal year 2028 to preserve transportation fund resources, noting that the adjustment would leave a corresponding hole in the general fund of about $9.7 million in FY 2028. Speakers characterized that as shifting a deficit into the general fund for a future budget year and discussed pressure on the general fund and transportation services, including recent staffing reductions at the Agency of Transportation and delayed paving work.
Committee members said they added language clarifying intent, adjusted effective dates so some changes would be effective on passage while others would take effect July 1 of a specified year, and refined draft language around an $18 million construct referenced in the bill.
The committee also reviewed language that would move several fee provisions into statute and repeal certain rulemaking authority next July, with a note that conservation camp fees would be treated differently.
Finance — 10:20
In a second Finance meeting, committee members continued work on H.933, the miscellaneous tax bill, and conferee language for the committee of conference. Members said they could accept proposed numbers if appropriations was informed and the committee accepted that the proposed changes would create a $10 million cost for a future year. Draft intent language was altered from saying “all” revenue to saying “additional” revenue in at least one instance.
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The committee discussed language governing scholarship and grant organizations (SGOs). One change under review would have the legislature designate SGOs and send the list to the federal government, replacing the senate version with a house version. Conferees also discussed subdivision language that would require memoranda of understanding between program providers and public schools, independent schools, or school districts. The proposed MOU provisions would require verification that program providers offer programming for after school, during school break, supplemental tutoring or similar activities. Committee members characterized those MOU requirements as mandatory in the draft (using “shall” and “requirement”).
Members debated the allocation of decision-making authority for certain program payment distributions, referencing prior work that gave the governor authority to act more quickly than the legislature to prevent a missed year of payments described in the discussion as $1,700 payments going out to children. Committee participants said guardrails were included in the senate language and discussed retaining those guardrails while allowing administrative action.
The committee also addressed technical drafting choices about program timing language, penalties referenced as fines, and various rights- and fee-related provisions, including fish and wildlife fees and placing fee language into statute.
Conclusion
The coverage summarizes two Senate Finance Committee meetings held May 29 addressing proposals in the miscellaneous tax bill, including shifts in tax revenue deposits between the transportation and education funds, an estimated $9.7 million FY 2028 general fund effect, changes to meals and rooms and purchase and use tax splits, the removal of a municipal share provision in section 50, revisions to intent and effective date language, and new memorandum-of-understanding and designation provisions for scholarship and grant organizations. The meetings were convened by the Senate Finance Committee and focused on tax, transportation and education funding, program oversight language, and related fiscal impacts.
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