The conference committee on House Bill 289 voted Monday to reduce the constitutional budget reserve headroom provision from $30 million to $20 million, tightening the cushion available for unexpected state spending needs.

The change came through a conceptual amendment to Amendment HA4, which replaced the Senate's constitutional budget reserve draw language with modified House language. The headroom provision allows additional general fund appropriations to be covered by the constitutional budget reserve if needed later in the fiscal year.

Representative Josephson, the committee chair, proposed the reduction after Legislative Finance Division Director Alexi Painter outlined known and anticipated supplemental requests. Painter identified $11.6 million in general fund items the governor has submitted that are not in either chamber's version of the bill. That figure excludes a $1 million Statehood Defense item both bodies intentionally left out.

Adding a potential $4.6 million SNAP penalty from fiscal year 2024 performance brings the total to $16.2 million, Painter said. The penalty is under appeal and might be covered by existing appropriations rather than requiring new money.

"There are appropriations in a few columns. I am just going to cover the general fund appropriations," Painter said. "So the total general fund appropriations requested by the governor that are not in either version, and since the committee essentially adopted the higher version for either, it would be including those, total $12,584,400."

Painter noted that late items typically arrive in April amendments, including election fund capitalizations of $100,000 to $200,000 and unpredictable judgments and settlements. Last year those items totaled $300,000 to $400,000 in unrestricted general funds.

The amended language differs from the original House version in two ways. First, it uses a simpler calculation that cannot be affected by other appropriations. The provision now states that if unrestricted revenue available for appropriation is less than general fund appropriations that take effect this year, the difference is appropriated from the constitutional budget reserve to the general fund.

Second, the headroom language now specifies that only the amount of additional appropriations would be transferred from the reserve, rather than a flat $30 million regardless of need.

The amendment passed 5-1, with Representative Stapp casting the lone no vote. Senator Hoffman, Senator Stedman, Senator Cronk, Representative Shrogy and Representative Josephson voted yes.

Representative Stapp objected to including any constitutional budget reserve draw language in the bill, arguing the supplemental does not require reserve funds to be fully funded. Stapp maintained that position when the full conference committee report came up for final passage.

Senator Hoffman defended the approach. "We have adopted language that says the constitutional budget reserve account will only be used if necessary," Hoffman said. "We have had substantial increases in forecast of oil prices, and we are hoping that we will be able to accomplish all of the funding without using the CBR."

The conference committee substitute for House Bill 289 passed out of committee 5-1, with Stapp again voting no. The report now returns to the House and Senate floors for final votes.