S.20.3-3: Coronavirus Budgetary Considerations Act (Law’d)

[tmthforu94]

Coronavirus Budgetary Considerations Act
To allow the Southern budget a degree of flexibility during the ongoing pandemic and recession

Section 1. Title
This law shall be refered to as the Coronavirus Budgetary Considerations Act.

Section 2. Findings
1. The South is currently facing a crisis which presents a significant threat to public health and the economy.
2. The effects of the pandemic and economic recession are expected to result in a significant decrease in the amount of revenue collected by the Southern Government which will likely lead to a budget decifit.
3. Important services and funding provided by the Southern Government may be under threat if no action is taken.

Section 3. Emergency Declaration
1. This chamber hereby formally endorses the state of emergency declared by Former Governor West_Midlander in Executive Order #006.
2. This emergency shall allow for the Southern Government to run budget deficits for FY2020 and FY2021 under the process set out by Article III Section 9 of the Southern Constitution.
3. The governor shall maintain the authority to rescind this state of emergency but must seek approval from the chamber to repeal Subsection 2.

Section 4. Implementation
1. This law shall take effect immediately upon passage.

Sponsor: Thumb21

Minimum 48 hours for debate. The sponsor is invited to advocate for the bill.

[thumb21]

Due to the pandemic and recession, economic activity has decreased significantly and unemployment has surged. This means that revenue is likely to fall quite a bit and there will be more pressure of various government programs which will probably mean that we will enter into a large deficit if spending isn't also cut significantly. That essentially gives us a choice between running a temporary deficit until we are back on our feet or making drastic cuts to services people rely on, which in my view is likely to prolong the recession.

Under the Southern Constitution, the South can't run a deficit with exceptions made for war and emergency which the chamber must 'endorse' by a two-thirds majority. So what this bill does is formally 'endorses' the decision to declare a state of emergency for coronavirus and allows the Southern Government to run a deficit for the next couple of years.

This bill needs two-thirds support in order for it to have teeth so we need to have a broad consensus in the chamber. I'm interested in hearing everyone's thoughts and concerns.

[tmthforu94]

My main question: What is the justification for this being 3 years, as opposed to 2 or 1?

Also for everyone's reference:
2018 budget totals (amended version): https://talkelections.org/FORUM/index.php?topic=300070.msg6389517#msg6389517
2019: https://talkelections.org/FORUM/index.php?topic=316709.0
2020: https://talkelections.org/FORUM/index.php?topic=365820.0

Budgets had been done incorrectly for a few years until 2019, when Encke helped correct the numbers - essentially we had a surplus of ~$250 but had been calculating things wrong, so by retroactively fixing it, it brought us down to where we are now.

The 2019 budget reserves was $22B, the 2020 budget was a direct copy of the '19 but they missed updating the reserves. Based on the +$80.44B balance from '19, that leads me to believe our current reserve level is $102.44B. Someone please correct me if I'm wrong, numbers are not my strongsuit.

[thumb21]

My main question: What is the justification for this being 3 years, as opposed to 2 or 1?

To allow some flexibility, we don't really know when the budget will return back to where a surplus is realistic. If some tax increases or cuts to spending are needed, then there'll be time to phase them in rather than suddenly imposing them mid-way through a recession in a rushed attempt to piece together a surplus.

Thanks for doing those numbers, they seem correct.

[reagente]

I will support allowing the South to run a deficit for FY2020 only.

If economic circumstances dictate that the South needs to run a deficit for additional fiscal years, we can always pass similar legislation authorizing that later. It's very unclear how long this crisis will last or what the final economic fallout from it will be.

[thumb21]

I will support allowing the South to run a deficit for FY2020 only.

If economic circumstances dictate that the South needs to run a deficit for additional fiscal years, we can always pass similar legislation authorizing that later. It's very unclear how long this crisis will last or what the final economic fallout from it will be.

I don't think its realistic to say that a surplus is possible or likely next year or even the year after. This bill gives us a time to aim to fix the deficit by and gives certainty to people who use various programs and services that there aren't gonna be sudden and extreme cuts.

[Senator-elect Spark]

Out of fiscal responsibility, I do not support running a deficit for the next two fiscal years. In general, I support a small reduction of the region sales tax and a modest increase in the gas tax to offset this loss of revenue. During this time, many Southerners will be forced to isolate and traveling is not as widespread, I don't see an issue with increasing the gas tax to the level that DTC recommended.

I would like to ask the Speaker to bring any data of the sales tax to the floor.

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

My main question: What is the justification for this being 3 years, as opposed to 2 or 1?

Also for everyone's reference:
2018 budget totals (amended version): https://talkelections.org/FORUM/index.php?topic=300070.msg6389517#msg6389517
2019: https://talkelections.org/FORUM/index.php?topic=316709.0
2020: https://talkelections.org/FORUM/index.php?topic=365820.0

Budgets had been done incorrectly for a few years until 2019, when Encke helped correct the numbers - essentially we had a surplus of ~$250 but had been calculating things wrong, so by retroactively fixing it, it brought us down to where we are now.

The 2019 budget reserves was $22B, the 2020 budget was a direct copy of the '19 but they missed updating the reserves. Based on the +$80.44B balance from '19, that leads me to believe our current reserve level is $102.44B. Someone please correct me if I'm wrong, numbers are not my strongsuit.

So the 2020 floor procedure was a little confusing, but the chamber appears to have actually passed the Clyde Amendment here: https://talkelections.org/FORUM/index.php?topic=365820.msg7288612#msg7288612

This lists a balance of 37.53 Billion

[thumb21]

Out of fiscal responsibility, I do not support running a deficit for the next two fiscal years. In general, I support a small reduction of the region sales tax and a modest increase in the gas tax to offset this loss of revenue. During this time, many Southerners will be forced to isolate and traveling is not as widespread, I don't see an issue with increasing the gas tax to the level that DTC recommended.

I would like to ask the Speaker to bring any data of the sales tax to the floor.

Fiscal responsibility doesn't mean running a surplus at all costs. It means running a surplus in 'normal' times which means that when bad times come, you can afford to enter into a temporary deficit which allows you to maintain most programs and funding because you've built up a reserve. I think that even if this bill is rejected, the chamber will likely be forced to authorise running a deficit anyway when its debating the next budget because not doing it would mean suddenly cutting billions in programs and spending which would only prolong the recession, in addition to the obvious social impacts.

[Senator-elect Spark]

Out of fiscal responsibility, I do not support running a deficit for the next two fiscal years. In general, I support a small reduction of the region sales tax and a modest increase in the gas tax to offset this loss of revenue. During this time, many Southerners will be forced to isolate and traveling is not as widespread, I don't see an issue with increasing the gas tax to the level that DTC recommended.

I would like to ask the Speaker to bring any data of the sales tax to the floor.

Fiscal responsibility doesn't mean running a surplus at all costs. It means running a surplus in 'normal' times which means that when bad times come, you can afford to enter into a temporary deficit which allows you to maintain most programs and funding because you've built up a reserve. I think that even if this bill is rejected, the chamber will likely be forced to authorise running a deficit anyway when its debating the next budget because not doing it would mean suddenly cutting billions in programs and spending which would only prolong the recession, in addition to the obvious social impacts.

I agree. We have the sizeable rainy day fund. We should use it effectively.

[thumb21]

Out of fiscal responsibility, I do not support running a deficit for the next two fiscal years. In general, I support a small reduction of the region sales tax and a modest increase in the gas tax to offset this loss of revenue. During this time, many Southerners will be forced to isolate and traveling is not as widespread, I don't see an issue with increasing the gas tax to the level that DTC recommended.

I would like to ask the Speaker to bring any data of the sales tax to the floor.

Fiscal responsibility doesn't mean running a surplus at all costs. It means running a surplus in 'normal' times which means that when bad times come, you can afford to enter into a temporary deficit which allows you to maintain most programs and funding because you've built up a reserve. I think that even if this bill is rejected, the chamber will likely be forced to authorise running a deficit anyway when its debating the next budget because not doing it would mean suddenly cutting billions in programs and spending which would only prolong the recession, in addition to the obvious social impacts.

I agree. We have the sizeable rainy day fund. We should use it effectively.

That's what this bill is trying to enable.

[Senator-elect Spark]

Out of fiscal responsibility, I do not support running a deficit for the next two fiscal years. In general, I support a small reduction of the region sales tax and a modest increase in the gas tax to offset this loss of revenue. During this time, many Southerners will be forced to isolate and traveling is not as widespread, I don't see an issue with increasing the gas tax to the level that DTC recommended.

I would like to ask the Speaker to bring any data of the sales tax to the floor.

Fiscal responsibility doesn't mean running a surplus at all costs. It means running a surplus in 'normal' times which means that when bad times come, you can afford to enter into a temporary deficit which allows you to maintain most programs and funding because you've built up a reserve. I think that even if this bill is rejected, the chamber will likely be forced to authorise running a deficit anyway when its debating the next budget because not doing it would mean suddenly cutting billions in programs and spending which would only prolong the recession, in addition to the obvious social impacts.

I agree. We have the sizeable rainy day fund. We should use it effectively.

That's what this bill is trying to enable.

I support it for this current fiscal year and nothing further.

[tmthforu94]

OK, it wasn't clear to me that the Clyde amendment had passed, whether it was adopted seems a bit confusing. Even so, Clyde's amendment doesn't take into account the $80.44B that was left as a balance in the 2019 budget. That would mean an updated balance of $117.97B. This number could change again as we await a CG report on the excise tax revenue.

I support allowing a deficit for the FY2020, and also FY2021. I don't support the current version of including FY2022 as I believe that is too far down the road. We need a better idea on the effects of the virus, and as Reagente stated, should there be a need to extend this further, a future Chamber can do so. I propose the following amendment:

Coronavirus Budgetary Considerations Act
To allow the Southern budget a degree of flexibility during the ongoing pandemic and recession

Section 1. Title
This law shall be refered to as the Coronavirus Budgetary Considerations Act.

Section 2. Findings
1. The South is currently facing a crisis which presents a significant threat to public health and the economy.
2. The effects of the pandemic and economic recession are expected to result in a significant decrease in the amount of revenue collected by the Southern Government which will likely lead to a budget decifit.
3. Important services and funding provided by the Southern Government may be under threat if no action is taken.

Section 3. Emergency Declaration
1. This chamber hereby formally endorses the state of emergency declared by Former Governor West_Midlander in Executive Order #006.
2. This emergency shall allow for the Southern Government to run budget deficits for FY2020,and FY2021 and FY2022 under the process set out by Article III Section 9 of the Southern Constitution.
3. The governor shall maintain the authority to rescind this state of emergency but must seek approval from the chamber to repeal Subsection 2.

Section 4. Implementation
1. This law shall take effect immediately upon passage.

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Also will post the pay go requirements for the chamber's reference. It does require a pre passage cost estimate and two separate votes if this is to take effect before the next budget is passed in March - one to authorize the early effective date and one to pass the rest of the bill: https://talkelections.org/FORUM/index.php?topic=316681.0

[thumb21]

I think it'd be a big mistake if we don't give people who rely on important services and funding some certainty by providing the budget with a long enough cushion to avoid large and sudden tax increases or spending cuts. That said, I'll allow the amendment to pass since it appears to be nessessary in order for the bill to pass.

[tmthforu94]

Setting 24 hours for an objection to the amendment.

[Senator-elect Spark]

No objection

[tmthforu94]

With no objections, the Tmth amendment has been adopted. Debate resumes.

[tmthforu94]

With this amendment, I am satisfied with the wording of the bill and will vote for final passage. We still don't have a full understanding on how COVID-19 has affected our economy long-term, we're missing some data short-term as well. This ensures we can address our short-term needs for the next year plus, and I have full confidence that should this be required in FY22 and onward, future Chamber's will act appropriately.

[thumb21]

Are there any more issues or concerns?

[tmthforu94]

I motion for a final vote. Delegates have 24 hours to object.

[Senator-elect Spark]

No objection.

[tmthforu94]

Coronavirus Budgetary Considerations Act
To allow the Southern budget a degree of flexibility during the ongoing pandemic and recession

Section 1. Title
This law shall be refered to as the Coronavirus Budgetary Considerations Act.

Section 2. Findings
1. The South is currently facing a crisis which presents a significant threat to public health and the economy.
2. The effects of the pandemic and economic recession are expected to result in a significant decrease in the amount of revenue collected by the Southern Government which will likely lead to a budget decifit.
3. Important services and funding provided by the Southern Government may be under threat if no action is taken.

Section 3. Emergency Declaration
1. This chamber hereby formally endorses the state of emergency declared by Former Governor West_Midlander in Executive Order #006.
2. This emergency shall allow for the Southern Government to run budget deficits for FY2020 and FY2021 under the process set out by Article III Section 9 of the Southern Constitution.
3. The governor shall maintain the authority to rescind this state of emergency but must seek approval from the chamber to repeal Subsection 2.

Section 4. Implementation
1. This law shall take effect immediately upon passage.

Delegates, a final vote has started. Please vote Aye, Nay or Abstain.

[reagente]

Aye

[Senator-elect Spark]

Aye