Navigating Connecticut's Budget Landscape

In this episode of The Voice of Retail podcast, Tim Phelan discusses The Connecticut Retail Network and its significance in the state's economy. He interviews Jeffrey Beckham, Secretary of the Office of Policy and Management, about the recent budget introduced by the governor of Connecticut. They delve into the budget process, the state's financial status, challenges such as Medicaid costs, the importance of the spending cap, and the legislative process for budget negotiations. Beckham explains the role of bonding in funding capital projects and the implications of the budget on various state agencies.

 Takeaways

• The retail industry is a major employer in Connecticut.
• Connecticut's budget process is lengthy and involves multiple agencies.
• The state has a significant budget reserve fund.
• Medicaid costs are a major challenge for the budget.
• The spending cap is crucial for fiscal responsibility.
• Bonding is used to fund capital projects like roads and bridges.
• Debt service is a significant portion of the budget.
• Legislative negotiations can be complex and contentious.
• The governor's budget reflects his priorities and vision.
• Future budget discussions will focus on tax cuts and spending needs.

The Connecticut Retail Network is The Voice of Retail, at the State Capitol and across the state. Our podcast features timely conversations about retail topics and trends, with retail industry leaders and business owners from throughout the state. It’s a podcast for retailers – and their customers! To learn more about us please visit https://ctretailnetwork.com/

Chapters

• 2:00 Overview of Connecticut's Budget Process
• 6:58 Current Financial Status and Challenges
• 11:53 Understanding the Spending Cap
• 17:54 Legislative Process and Budget Negotiations
• 23:56 Bonding and Capital Projects
• 30:01 Future Outlook and Conclusion

Transcript

Transcript:

Speaker 1 (00:03)

Welcome to the Voice of Retail, the podcast of the Connecticut Retail Network. I'm Tim Phelan, president of the Connecticut Retail Network and your host for the podcast. The retail industry is the nation's largest provider, private sector employer, contributing $5.3 trillion to our annual GDP and supporting more than one in four jobs, 55 million working Americans. The Connecticut Retail Network represents the retail industry in the state of Connecticut.

an industry that supports more than 470,000 jobs and contributes more than 34 billion to our state's economy. 24 % of jobs in Connecticut, nearly one in four, are supported by the retail industry and more than 98 % of all retail companies are small businesses employing fewer than 50 people. The Connecticut Retail Network is the voice of retail at the state capitol and across the state. On our podcast, we'll bring you timely conversations about retail topics and trends.

with retail industry leaders, business and political leaders and business owners throughout the state. It's a podcast for retailers and their customers. After the podcast, learn more about Connecticut retail industry, visit our website, www.ctretailnetwork.com. And if you have a suggestion for a retail topic you'd like to hear more about, please let us know by email and we welcome your suggestions. Today, we are very excited and happy

to be joined by Mr. Jeffrey Beckham. Mr. Beckham was appointed by Governor Ned Lamont to serve as secretary of the Office of Policy and Management effective March of 2022. He's stepping up from his role as undersecretary for legislative affairs, a position he was appointed in April of 2019. Mr. Beckham has over 30 years experience in state policy development and administration, including service in all three branches of state government.

He previously served in the Department of Administrative Services as a staff counsel and director of communications and the former Department of Public Works as a managing attorney. is currently serving his second stint at OPM, having served before his undersecretary for legislative affairs in the Rell administration. And I think I have known Jeff, for 30 plus years.

So it is a pleasure to see you.

Speaker 2 (02:42)

Good to see you, Tim. Happy to be with you.

Speaker 1 (02:44)

and so very happy that you're in this role. It's well-deserved, and your breadth of experience really, I think, helps you, and so it helps the state of in return for your work as secretary. So thank you for your service. So we wanted to talk a little bit today because we're fresh off the governor's introduction of his new two-year budget. So before we get much further, can you just tell us

Speaker 2 (03:00)

Thank you.

Speaker 1 (03:13)

What years? This is always an issue for folks to understand the Connecticut budgeting cycle. Right now, we are in 2025. But what is the two-year budget that the governor introduced to the legislature on Wednesday?

Speaker 2 (03:29)

Sure. That's the budget for the biennium, the two-year period that starts this July. So July 1, 2025 through the end of what would be fiscal year 27. That's the two years later. It's the June 30th of 2027. Your fiscal year shorthand is always the year that it ends. So FY25 is this year because this year's fiscal year ends this June 30th, 2025. So the next biennial period, the two-year period.

starts July 1, it'll run through June 30th of 2027. So it's fiscal years 26 and 27.

Speaker 1 (04:04)

27. And so as we head into that, by any means, the state's in pretty decent shape. We were talking a little bit before we started about some of the bad old days when we had to go looking around for dollars and stuff. Can you talk a little bit about where we are terms of ... Because members ask a lot. say, we've got a lot of money, we've got surpluses. What does it all mean? And how can you describe that for us?

Speaker 2 (04:31)

Well, we are in a good place, but we have our challenges. There are increasing costs all over the place that we have to deal with. We put out a letter to the Comptroller every month that you're probably familiar with where we tell you what's going on in the current fiscal year. And if you're reading that, you're seeing we've got a lot of increased costs associated with Medicaid, as well as some of the other programming and caseloads in this state. But that's a current year kind of administrative

issue we deal with that during that this session in something called the deficiency bill that's pretty technical inside stuff for your your members but we are in a good good space from the hundred thousand foot level we've got a four point one billion dollar budget reserve fund largest it's ever been in state's history we have because of our you've heard a lot about the fiscal guardrails will because of those guardrails we've been able to save

paid down a lot of our long-term liabilities, principally our pension funds and teachers retirement funds, and we've saved, we've paid by the end of this biennium, we will have paid down about $10 billion of that debt. That's 10 billion with a B, which has saved us in the general fund, our pension fund requirements, the actuarially determined contributions that you have to make as an employer. We've saved about 700 or $800 million.

in the general fund because we've paid down that long-term debt. we've made tremendous progress.

Speaker 1 (05:55)

Do because the interest due on the debt that we are saving that money or is it jus 

Speaker 2 (06:00)

It's because, well, we put all that, we paid all that principal down, the $10 billion, so there's less that we have to contribute, know, attributable to that particular pay down. Now, obviously, how the fund itself performs in the market, how many, what you're doing with COLA's, who's coming onto the fund, who's, you know,

becoming deceased and no longer withdrawing. So there's actuarial tables, right, of how many lives you're covering at any given time. So that varies, as does the performance of the funds in the marketplace. So the needs are changing. But just paying down that $10 billion, all things being equal, has saved us $700 or $800 million off our what we call the ADEC, the Actuarially Determined Employer Contribution, that we have to pay every year. So that's been great.

So yeah, we're in a good spot. We've balanced budgets. We've had surpluses, big surpluses the last five years. Hoping to have more this year and next. That's what we're programming in the governor's budget. We're always concerned about the out years. We're always watching the economy. What's going on with all of our tax types? What's the market doing? That'll determine, you know, how retailers are doing. guys, sales tax is a huge, it's our...

Speaker 1 (07:09)

as you're doing.

Speaker 2 (07:13)

It's our number two revenue behind the personal income tax. It's been a little sluggish in the last year. We're hoping it's returning to a historical normal. I think we're accounting for 2 and 1 half, there about, percent growth in the sales tax. Obviously, we need that. We want that.

Speaker 1 (07:29)

Yeah. Yeah. You have a complicated job as the secretary at OPM. You have to, in addition to explaining the budget, funding for the state agencies all sort of goes through you. So, can you talk a little bit about how does the budget come together? What's the process that you go through to put together? And what is the bottom line number for the state budget total? Yeah.

Speaker 2 (07:55)

So for 26, it's going to be just under 27 billion all funds

Speaker 1 (07:59)

Yeah. So you're running a $27 billion company, it's called the state of Connecticut, and you have to put together a two-year budget. What does that process look like?

Speaker 2 (08:11)

Well, it's lengthy. starts in the summertime. We send out guidance to our agencies with instructions on how to submit. We have an automated system where they upload all of their information about their current services, what they think their needs are, what adjustments they need to the current services. That's the current law, the current programming. What do we need next year to keep paying it? And what changes do we recommend? So then we have options off of that. You have expansion options. You have reduction options. We work through all those with our agencies.

Those are due back to us at OPM in the fall. They work on that in the summer. They send us their work product in the fall, and we start chewing on it here. We go back to them with questions, and we iterate with them for a couple months. Obviously, at some point, the contours or outlines of a budget start to come together, and we start to have meetings with the governor. He starts to give me direction. OK, do this. Don't do that. I want to emphasize this. I'm not as concerned about that. You're OK to make those reductions.

Here's some expansions I want to see. We take direction from the governor and this reflects his vision, his agenda, and I serve at the pleasure.

Speaker 1 (09:18)

Yeah. And I'm sure you've got commissioners for all these agencies pulling at you and pushing and getting their priorities.

Speaker 2 (09:25)

We often disappoint people. disappoint stakeholders. We disappoint commissioners. That's part of my job. And I try to be the bad cop and let the governor be the good cop. That's kind what I do.

Speaker 1 (09:37)

Has there been a trend over the last couple of years on the spending side of growth in areas that are causing you or giving you and the governor heartburn? And what should we know about that?

Speaker 2 (09:49)

Medicaid. Medicaid. have about a million members on Medicaid in the state of 3.6 million people. We thought after the pandemic that the Medicaid rules, they're expanded and we got some federal enhanced money to take care of that during the during the pandemic. We hoped and believed it was going to come down. We planned for that. It has come down those numbers in other states, but here in Connecticut for reasons we don't entirely understand at the moment, or at least I don't.

We're still up there. We got big caseload of Medicaid and the cost per case is also increasing. Healthcare costs continue. Healthcare inflation continues to be a big driver of some of our long-term costs. And we've got a couple of thoughts in the budget about saving some money in Medicaid. I briefed the press yesterday on, I guess it was the day before yesterday now, on that. And I'm about to brief appropriations on Monday on some of those ideas for saving.

the growth in Medicaid. That's probably our biggest driver. have a lot of we've hired back up in state service. had a bit of a you we had the pandemic and then we hit what we called internally the silver tsunami. There were some changes in the retirement system that incentivize a lot of people to retire in the year twenty twenty two as of July of that year. So we had a bunch of people exit state service and we suddenly had a lot of vacancies. We have now hired back up to

pre-pandemic levels of staffing. And those personnel costs are driving us as well. So lots of cost challenges for us. We've been admonishing agencies to, we've got to tap the brakes on hiring. We got a only priority hiring. I did a memo in November on that to the agencies. And we've got some real deficiency challenges. Part of what I...

talked about in front of the press two days ago was our challenges with cap room, spending cap room in fiscal 26, the first year of this budget. Folks normally think about budgets in terms of balance, right? You've got to have your revenues balanced, your expenditures. Well, that's part of what we have to do. But as you know, we also have a spending cap.

Speaker 1 (11:53)

Yeah, we should talk about that a little bit too. And what that means, yeah 

Speaker 2 (11:55)

Yeah, it doesn't Yep,

it doesn't matter how much revenue I have I have a cap I can't spend past a certain amount and So I might have excess revenue which would go to the budget reserve which would go to pay down that pension stuff So the cap does a lot of work it is I've said to many people it's the most important guardrail Yeah, if you're serious about fiscal guardrails, the spending cap is for me the most important

And that keeps us, and we had real trouble with cap room in 26, the first year of this biennium, because, you recall, we did not adjust the budget last year. Remember, they decided not to adjust the budget in 25, which was a missed opportunity. We could have adjusted some appropriations. So we had to pick up two years of growth, basically, in the fiscal 26 budget, with the cap at a certain level. But current services consumed almost all of our cap room in 26.

So in this budget, if you read it, you'll see that most of our new spending is actually in the second year. I didn't have cap room in the first year. I'm just paying the bills for the current law, for the most part, in 26. So real.

Speaker 1 (13:01)

people forget the spending cap came into place when we adopted the, we, when the legislature adopted the income tax back in 1991. That was a crazy, crazy time, but that was part of the push and pull of getting support for the income tax. Business community pushed hard for a spending cap. And in the end, that balance kind of worked. Cause let's just go back.

Speaker 2 (13:10)

We were both there.

Speaker 1 (13:31)

to the Wednesday governor presents the budget to the legislature. A different speech than governors have given over here just sort of.

Speaker 2 (13:44)

We're

in good place in Connecticut compared to a lot of our sister states. I don't know if you have members in other states or who know about branches of theirs in other states, but other states are having some real difficulties that we're not. They're raising taxes. They're cutting spending. Some governors are perhaps improvidently cutting taxes, even though they know they're going to have out your problems. thinking of New York. so, yeah, we're in a good spot. So he gave a more breezy, I would say positive message.

He also, I think, was trying to counter some of the negativity that's been out there in the press in the last couple months since the election and some of the stuff we're hearing from DC that's a little troubling. So I think he just wanted to strike a different tone. It reflects who he is, basically.

Speaker 1 (14:27)

Yeah. Yeah. Well, after the budget is presented, remember back, you may remember this Governor O'Neill, he used to take off after the budget was presented. He'd go to Florida and he'd say, it's not my job is done. I've given it to the legislature and I'm going to take a break and not come back and deal with it when I come back. What's the next process now? You've got, put the budget together, you've talked to your commissioners, you've already gotten some of them mad. Now you got them back in place and everybody's

Everybody's rolling in the same direction in terms of administration, what happens? Well, you anyway, publicly anyways.

Speaker 2 (15:02)

Yes, I hope they are. hope they're supposed to when they get in front of the committees. So yeah, we have, I've got finance this afternoon and then I've got appropriations on Monday for the overall picture. But then each commissioner brings their agencies segment of the budget in a separate hearing to appropriations and they will answer more detailed questions about their agency's budget over the next couple of weeks in front of appropriations. And the committees will have hearings. All the committees will have hearings on bills that they have that

They're going to take a different view of the budget. They always do. They're separate, co-equal branch. They'll have their own thoughts about spending and taxes. And they'll spend the next couple of months until their final JF deadlines for them to report legislation. I think for finance and approps, it's early May. You probably know better than I do.

Speaker 1 (15:50) 

I haven't checked. yeah, don't think it's that late. I think it's late April.

Speaker 2 (15:55)

late

April okay yeah I think it used to be as late as early May but they will they will report that'll be the time period when they report their budget

Speaker 1 (16:04)

In between that time, are they in conversation with you? Like, you know, the finance co-chairs are talking to you, the provost

Speaker 2 (16:12)

Well,

sometimes if they need answers to specific questions, yes, factual stuff, know, can you tell what's going on with this? What's going on with that? They're not asking me my opinion about what they should do. Understand that. And I'm not giving my opinion because I mean, I my opinion to my boss, who's the governor. They've got their own. As I say, they're a separate co-equal branch. But, you know, we're having those kinds of factual conversations. They'll have follow up questions and we will we'll be interacting with them on that basis.

And there may be some informal conversations. I don't know, you know, the discussions they have with their leadership. Sometimes their leadership will approach the governor about things and sometimes I'm in those meetings. But yeah, gets intent. We generally, you know, they do their thing and by late April they have their version of the budget and tax package and bond package. And then we have to reconcile our two versions and we negotiate and they will produce the final version that they vote on and hopefully the governor can sign.

Speaker 1 (17:19)

Jeff Beckham, thanks again, Jeff, for your time. You were just talking before our break about the appropriations and finance committees and back and forth conversations you might have with them about their work and how does that work again? Do they press you on certain things or do they kind of leave you out of it and then come back and say, this is what we've come up with?

Speaker 2 (17:46)

Well, they're going to press me on Monday when I'm in front of the committee explaining the governor's budget. That's where I get pressed to the extent that I get pressed at all. But once they get into their process, it's pretty much their process. As I say, it'll be questions they'll ask. And they may run some things by us, see just factually, will this make sense if we did it this way? But no, we're

We had a long period, as I say, it started in the summer and it's going to conclude on Monday. And really the ball is in their court now for a couple months and we'll see what they want to do at the end.

Speaker 1 (18:18)

And the legislature of course has their own office of fiscal analysis, which is really established to kind of be their OPM, if you will. And so they sometimes have different, differing opinions than you and your team about spending and revenue. And can you just talk a little bit about how that works?

Speaker 2 (18:43)

Well, OFA is a little different. They are nonpartisan, and they are career professionals. They're not politically appointed. So they do provide the General Assembly, Republicans and Democrats, can rely on OFA advice. And it's mostly factual advice. It's like, what's the fiscal impact of this policy change or that policy change? And they will independently analyze our budget proposal. they sometimes come up with different numbers.

One thing that we collaborate with OFA on, well we collaborate with them on a bunch of things, three times a year we do revenue estimates, consensus revenue estimates, which it's a negotiation with us and OFA and we agree on what the projected revenue is gonna be for whatever period we're talking about. Usually it's three years out. We do that three times a year. Often we sort of split the difference between our math results. We also, they take a...

They obviously analyze our budget and will analyze and produce fiscal notes throughout the session on all the legislation, including the budget and revenue package produced by the approps and finance committees. And then they are in the room with us at the end, typically, giving advice to the legislators as we go through line by line. Well, OK, here's where we think that's going to put you in terms of the cap. You've got this much cap room to spend. Or here's what we think that's going to do with revenue.

So they're giving advice to the legislators and we're usually present and sometimes we agree, sometimes we don't, sometimes that's a little chat we have to have. they play an integral role and they are well regarded by all sides I would say for the most part and we trust their advice. the other thing that we collaborate with them on regular basis is it is a kind of an agreed consensus between OFA and OPM as to what the spending cap treatment should be.

Because sometimes the way you spend something is or is not under the cap or is or is not affected by the cap. Or if you take some spending out from under the cap, you have to rebase the cap. So the rebasing has to be something we agree with OFA on. So those kinds of technical, administrative, behind the scenes things, we do have to have a dialogue with OFA and we have to come to consensus about cap treatment and things like that.

Speaker 1 (20:50)

So it's a long session. we ended June. now let's just say we're in April or May and the legislature finance appropriations goes first, right? They report a budget and then think that and then finance goes.

Speaker 2 (21:04)

I think that's, used to be that, I don't know, did they switch at one? don't know. They're within a day of each other. It's like one's Thursday, one's Friday and they used to

Speaker 1 (21:07)

I think

Senator

von Farah always complains about the process thinking that it's not the right ... But in any event, they produce a budget and then that's when the negotiations with your office and legislative leaders begins, right? Yes. How does that typically work?

Speaker 2 (21:30)

I'm not sure there's a typical way that it works. seems to be different every year. At that point, the leaders, especially the House leadership in recent years, gets really involved and starts meeting almost directly with the governor, like trying to get a deal done, because everyone likes to get out on time. It's considered a bad year if we're not out on time. So we always try to avoid that, especially if there's no good reason for it.

Speaker 1 (21:56)

When you got all this money, you Exactly. There's no reason why you can't get it.

Speaker 2 (22:00)

Although I gotta tell you the haggling over the money regardless of whether there's not enough or too much It's almost worse to have too much. Yes Because you got a haggle over every little you know, at least when you don't have enough it's like well, we can't do that We can't that's an easy answer. I can't do it. Yeah, when there's when there's plenty around now I'm not I'm not gonna concede that there's plenty around because again, we have that cap. We have a spending cap We have to stay under so we don't have unlimited ability to spend my god

Speaker 1 (22:07)

Everybody wants something, right?

by the way, we didn't have Sneak-App.

Speaker 2 (22:30)

Yes, yes. So we might have a large amount of revenue available, but we can't spend it all is the point. So.

Speaker 1 (22:38)

of helps focus your conversations around a deal on a budget, right? I mean, if you have this cap, everybody knows we've got to get to this cap, then below the cap, it's just some, categories does the money go in and how much goes right. There's another part of the budget that we haven't really touched on, and that's the bond package. Sure. And just explain what bonding is. I mean, I'm sure most people understand it, but it's probably worth reiterating again.

Speaker 2 (22:52)

That's right. Yep.

Bonds are financial instruments sold by the state, by the treasurer's office. It's borrowing money. It's basically the state borrows money and we pay back the bondholders typically over 20 years at whatever the rate is these days. it's a good deal. The state's good for it. It's not like we're a fly-by-night operation. So it's a pretty good investment. But the proceeds of those bonds then go into a pot and we spend it on things. Usually capital projects where we're building something

Probably the single biggest thing we spend borrowed money on is our roads and bridges, the special tax obligation bonds issued by DOT, which match federal money that comes to us. Now, special tax obligation bonds are different from general obligation bonds in as much as they're backed by revenue, principally gas tax and things like that. And those are better. You get little more favorable treatment of those because they're backed by revenue as opposed to being backed by the

full faith and credit of the state, which is what the GO bonds are, and we have to have a debt service line item, both in the transportation fund and the general fund, to pay back those bonds. So every year we are paying back those bonds, and that's about 11 % of our budget, of our general fund appropriations, is debt service, which is exempt from the cap, by the way. Debt service doesn't come under the spending cap, so you can...

You can have as much debt service as you like, but it's not good to have too much for a bunch of reasons. So we're among the higher, as your folks probably know, we're among the higher indebted states in the country. And have 11 % debt service, having debt service be 11 % of your general fund appropriations, that's a lot. That's a big thing that you're carrying and it's bigger than most states. So we have to an eye on that.

Speaker 1 (24:51)

Didn't Governor Lamont when first came in office put the state on a debt diet for? Yes. Yeah. our friend, the co-chair of the Finance Committee, Senator Farah, wasn't crazy about that.

Speaker 2 (25:03)

He was not no one is because everyone loves the bond funds because

Speaker 1 (25:07)

Because you can get bonding to build a firehouse. You bonding to get other little pet projects done.

Speaker 2 (25:14)

Yeah, in your district. Stuff in your district. Everybody loves the bond funds. It's the, you know, some would call it pork, but that's probably a pejorative.

Speaker 1 (25:26)

The

thing about bonds I think that people need to understand is the legislature can say, we're going to do $100 million worth of bonding work, but each one of those projects then have to get another approval by the bond commission. That's right. what is actually released.

Speaker 2 (25:43)

Yep,

the Bond Act, which passes every year, contains authorizations for pots of money to be allocated later by the state bond commission. So on a project by project basis or program by program basis, agencies or others bring proposals to the bond commission for allocation of bond funds, which that's where you get your money for your district project. And we do a fair number of those. Billions, about two billion a year goes out that way.

Speaker 1 (26:11)

Yeah. So now the negotiations between House and Senate leadership and your governor's office and you is complete. Legislature then passes a budget. It's adopted. It's approved. Everybody agrees. They're holding hands and skipping down the sidewalk together and governor signs it and you got a budget.

Speaker 2 (26:32)

Yep, that's usually the first Wednesday in June. We complete that. It's usually at midnight. The next day we will be in the governor's office with a little press conference. Usually I'm sitting there next to his desk and he's explaining what a great budget it is. Either Thursday or Friday, depending upon how much sleep we've had. And yeah, then we have to administer the budget. Then the work begins behind the scenes in all the agencies, including mine, of administering.

that budget and yeah and then it starts over we have to plan for the next year so that guidance goes back out in the summer to the agencies and we started all over again.

Speaker 1 (27:06)

So let me just, this is another probably question that maybe nobody cares about except me, but a legislator introduces a bill that says, require the department of consumer protection to hire three more people to do investigations of some business. And that money's not in the budget, right? DCP hasn't requested that. There's a fiscal note, legislature puts fiscal note. How does that work? mean, how can they

get around what's already in the budget by adding additional personnel.

Speaker 2 (27:42)

By the end of the session, we're all aware of the bills that cost money that require positions, things like that, and that has to all be accounted for in the budget they pass. So if DCP is getting those three positions, then the money for those positions needs to be in that budget. Yes, if they adopt something telling DCP to do something and they need staff for it, but the money's not in the budget, well, we're going to struggle to do that. And sometimes we won't establish it because we don't have the money for it.

Speaker 1 (27:56)

show up somewhere in the budget.

Speaker 2 (28:10)

People have to understand that the appropriated number in the Appropriations Act next to the name of the agency or next to the program, that is a legal limitation on what you can spend. You cannot legally spend more than that. It's the taxpayers' money. And we don't just give checkbooks to commissioners to spend money. You have to stay within that number. And if you don't have enough to pay all your bills, you have to stop spending at some point. And sometimes that's the answer we tell the legislature when they ask. It's, well,

You put this requirement on us, but you didn't give us enough money to fund it so we haven't started the program. It's a tough conversation, but sometimes you have to say that.

Speaker 1 (28:47)

Yeah, we're going to get, we're going to wrap this up pretty soon because I know you got to go, but where, you know, you rolled out your budget on Tuesday, the governor did. Where do you think the pressure points are going to come? Where's the pushback from the legislature going to be? Where are the areas of agreement? Where are the areas of potential disagreement?

Speaker 2 (29:04)

I think we did a good job of anticipating what a lot of folks were looking for in terms of child care and new investments in education, special education, think got a lot of people's attention. It's never enough, of course. They're going to want more for all that. But we've made a pretty good start. We've gotten good reviews, I think, in the press from the stakeholders, at least many of them, and a lot of legislators as well. You know, the tax thing is a

Republicans are out there wanting different tax cuts. Even some of the Democrats were talking about a child tax credit instead of the property tax credit. I think it's nice and you probably agree that we're having a tax cut discussion.

Speaker 1 (29:43)

Of

course, we'd like a more targeted tax cut, but that's, Hey.

Speaker 2 (29:46)

I for one think that's a great conversation to have. How can we cut taxes? I'm always happy to be in a how can we cut taxes discussion. But there's pressure on the other side to spend more, both in education and childcare and healthcare. That Medicaid problem, it's a consistent problem. It's going to be a problem in the next biennium as well.

Speaker 1 (30:07)

The federal budget is also aluminum.

Speaker 2 (30:10)

Yes, we got a lot of questions about that and the answer there is we just yet don't know. We need to know specifically what line items are going to be cut, what programs, what provisions are they hitting, and we will come up with options for the governor and I need to talk to him about what he wants to do and that's, we just don't know yet how that's going to play out.

Speaker 1 (30:32)

Well, this has been great, and we really appreciate your time. We know how busy you are, and I will probably see you in a little bit in the Finance Committee, so we won't keep you any more. But thank you again, Jeff. We really appreciate it. And as I said, we really look forward to continuing to work with you and your office, and best of luck through this budget process.

Speaker 2 (30:52)

Thank you, and you're very welcome, and it was nice to be with