Published Thursday, Dec. 4, 2008 | 5:50 p.m.
Updated Thursday, Dec. 4, 2008 | 5:51 p.m.
(Originally posted at 5:04 p.m.)
Legislators are turning to another bit of fancy financial footwork to limp to the end of the fiscal year on June 30.
While officially there is no deal cut for Monday and Tuesday's special session to deal with the $340 million shortfall, the state's mining association has been asked by lawmakers to pre-pay a years worth of mining tax, according to a lobbyist with knowledge of the proposal and a legislator involved in the talks. Both would speak only on condition of anonymity because the deal isn't finalized.
But the mining association has reportedly agreed to the deal.
Last year, the state's portion of the mining tax was about $38.3 million.
Mining, which has been one industry doing well thanks to high gold prices, has been a target of those who want to go after exemptions that they pay.
Prepaying the mining tax is a short-term solution, one that was done away with years ago. But it would help with cash flow now, and buy legislators more time to come up with a long-range solution. Or so the theory goes.
Gibbons said "we have a consensus approach" for a special session. He said he'll announce the proclamation, which will provide some details of how to make the $340 million shortfall, tomorrow at 10:30 a.m.
"I've given my word to leadership of assembly and senate to make sure various caucuses comfortable with plan," he said. "Once we do that, we'll give you every detail you want."
Still on the table is a loan of up to $160 million from a local government pool of money to meet operating costs. It could be backed by $187 million in general fund reserves.
Yet legislators should take comfort that they are simply following historical precedent, even if none of it is recent. Today, we wrote about the 1881 loan the state legislature took out from school accounts to fund an insane asylum and operating budget.
But state Archivist Guy Rocha has found an even more direct parallel.
In 1912, the third special session in state history, Governor Tasker Oddie called a special session for the express purpose of taking out a loan to supplement the state's general fund.
In his message to the Assembly and Senate on Feb. 23, 1912, Oddie said:
"I have convened your honorable bodies in extraordinary session... The General Fund in the State Treasury is exhausted and that, to enable the State to transact its business on a cash basis, provision must be made by the Legislature to borrow a sum sufficient to meet the emergency."
The more things change...