LFO Analyst: Stinson

The Emergency Fund is available to finance contingencies that are not addressed in approved agency budgets. It also finances general employee compensation increases. The following table separately identifies components within the Emergency Fund:

The size of the general purpose Emergency Fund has not expanded in the past several biennia proportionately with the growth in the General Fund budget. Unused special purpose appropriations have augmented the general purpose Emergency Fund.

The actual cost of implemented salary and benefit increases has exceeded the amounts appropriated to the Emergency Board. The $62.5 million appropriated in 1997-99 financed less than seventy percent of the actual increases. The balance of the cost was absorbed within agency budgets.

The Governor's budget included a general purpose Emergency Fund of $38.5 million, a salary and fringe benefit appropriation of $40 million, and special purpose appropriations totaling $17.4 million.

Historically, special purpose appropriations have been made to the Emergency Board for a variety of purposes. The table of approved Emergency Fund amounts presented above excludes these prior biennium amounts as they are not comparable to the uses proposed in the 1999-01 budget. The Governor's special purpose appropriations to the Emergency Board are listed in the table below along with special purpose appropriations made in the legislatively adopted budget.

The legislature appropriated a total of $145.6 million to the Emergency Board, $41.9 million for general purpose allocation, $40 million for salary and benefit adjustments, and $64.3 million for special purposes. The general purpose appropriation included reservations for the following purposes:

The following table lists the special purpose appropriations to the Emergency Board that were recommended by the Governor and those approved by the legislature:

LFO Analyst: Stinson

In 1981, in order to balance the budget, the legislature transferred excess SAIF funds in the amount of $81 million into the state General Fund. The State Supreme Court subsequently ruled in 1993 that this transfer was illegal and ordered repayment with interest. An agreement was reached with the parties involved to resolve the repayment in three installments of $65 million, $80 million, and $80 million. The agreement provides that the second and third payments be made on or before the thirtieth day after the adjournment of the regular sessions of the 1997 and 1999 Legislative Assemblies. The 1997 Legislative Assembly appropriated the required 1997 repayment from 1995-97 revenues.

The Governor's budget included an appropriation of $80 million to fund the final installment to repay SAIF as required by the litigation.

The legislature approved the recommended final $80 million payment to SAIF, however, the appropriation was made for the 1997-99 biennium rather than the 1999-01 biennium as recommended by the Governor. This action was consistent with the treatment of the first two payments.