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Auditor cites fiscal note issues, but 2017 House bill could have addressed some concerns


Rep. Hannah Kelly to file bill again in December

JEFFERSON CITY, Mo. – Recent findings by State Auditor Nicole Galloway’s office have brought into question the legislative process for estimating the financial impact proposed legislation will have on state funds.

The report, issued by the Auditor’s Office on October 11, says that the state government has no real idea if incentives, exemptions, and new tax laws are working as intended and that the state isn’t accurately measuring how much revenue is being spent.

“As a result, Missouri risks the same mistakes as other states that jeopardize their budgets with special interest giveaways,” Galloway said. “Too often these cost estimates are formulated with out-of-date information and require much greater economic analysis than is currently performed by the legislature.”

Galloway: Inaccurate fiscal notes worsen ‘budget crisis in Missouri’

According to Missouri law, fiscal notes for bills are put together to project their impact over the following two years or longer if necessary.

Galloway’s staff also pointed that there is no follow-up process to evaluate the accuracy of the estimates or the impact the new laws will have on the state’s funding.

“What we want to do is make sure that policymakers have the best information possible,” Galloway said.

“Over the past 20 years, policy decisions have been made that led us to where we’re at today. We need to take a realistic view on what the budget is and the legislature should want to have as much information as possible to be able to craft that budget and policy decisions.”

But the interesting thing to note is that the answer may already be in the works.

One piece of legislation, filed by Rep. Hannah Kelly during the 2017 legislative session, already sought to address issues with fiscal notes.

“I believe it would have,” Kelly said. “I absolutely think it would have addressed those issues.”

HB 1008 would have required the Joint Committee on Legislative Research to review fiscal notes for bills passed by the legislature in order to determine just how accurate the fiscal note was when compared to the actual cost of implementing the bill.

Under HB 1008, the committee would send a report to the General Assembly on bills with a greater than five percent deviation for use during the current budget or appropriations process.

The bill’s language did include a provision stating that there would be no penalty for inaccurate fiscal notes.

The bill passed through the Committee on Government Efficiency by a vote of 8 to 0 and the Rules and Legislative Oversight Committee by a vote of 12 to 0, but never made it to the House floor.

“It seems to me that there’s a general consensus that we have these monumental issues that we’re looking at, and we have to be accountable,” Kelly said. “We have to give fluctuation for the human error in the numbers, but when that expenditure reaches a maximum of five percent over the projected number, that then allows us to come to the table and figure out what’s going on and what we need to do to get back to the original figures, or strip it from the budget. It’s a simple, common-sense measure that helps put checks and balances in place and lets the people of Missouri know that we’re using the same process that they use when figuring their budgets at the kitchen table.”

One thing Kelly wants to make clear is that the purpose of the bill is not to knock the work of the Legislative Research team but to provide more accountability. The issue, she says, is the process, not the people doing it. She says it’s simply striving for excellence in providing a strong financial future.

“The legislative staff has to work within the confines of what we set forth, and they do tremendous, phenomenal work,” she said. “My goal is to give them easier and better measures and guide rails to work with in order to help us accomplish our fiscal goals.”

To that end, Rep. Kelly says she intends to file the bill once again, noting that the recent audit only serves to strengthen the case for such a piece of legislation.

“No matter the party, there’s a huge desire from Missourians across the state to move forward with a better fiscal situation, and that’s our goal,” she said.