On Friday, May 13th, Governor Newson released his Administration’s 2022-23 May Revision. The Rural Rundown captures highlights of the proposal as it relates to RCRC member counties. This revision is the next step in the State’s budget negotiations with lawmakers, who must pass a budget by June 15 for the July 1 start of the 2022-2023 fiscal year.

The Governor’s 2022-23 May Revision reflects an increase in the state’s General Fund revenues  higher than in the January estimates: currently expected to be at just under $55 billion. It also builds on the investments proposed in January, in the following program areas:  

  • Climate Resiliency; 
  • Addressing Homelessness; 
  • Cost of Living; and 
  • Public Safety Investment. 

In addition, the revision includes $18.1 billion in what is characterized as “direct relief” to help offset rising costs of fuel, etc., exacerbated by global inflationary pressures. This includes a $400 rebate to households based on registered vehicles; in addition, the Governor is proposing a temporary reduction to the diesel sales tax rate that was proposed in March 2022. Other areas of “relief” include: 

  • Rental assistance; 
  • Payments for outstanding utility arrearages; 
  • Subsidizing child care programs; 
  • Health care subsidies if federal subsidies expires; and
  • Retention bonus payments to an estimated 600,000 workers in hospitals and nursing homes.

While it was anticipated that the Governor’s 2022-23 May Revision would include an updated calculation of the Gann Limit and proposals to address it, the Administration has projected that the state will exceed the State Appropriations Limit or “Gann Limit” for the 2020-21 and 2021-22 fiscal years by “a small margin”. Thus, the Governor’s 2022-23 May Revision does not exceed the limit: the Department of Finance has calculated that the revised 2022-23 limit is $4.3 billion above the $131.4 billion estimated in January. Since the May Revision relies heavily on investments in infrastructure, fiscal relief, and emergency expenditures (all Gann-excludable), revising the limit upward appears to have created the breathing room the state needs to get through another year without exceeding the limit. The Administration cautions, however, that the limit may be exceeded in future years. Committing to additional ongoing spending will also make it much more difficult to meet all constitutional obligations due to the limitations imposed by the State Appropriations Limit.

Read RCRC's Rural Rundown of the Governor's 2022-23 May Revision here.