Top state budget negotiators have agreed to set aside $1 billion in a fund to address rising inflation.
The House initially had asked for $2 billion when they passed the inflation fund (HB 5011) last month to cover increased costs for state contracts due to the current high level of inflation. However, the Senate insisted lawmakers allocate the funds during the standard budget negotiations process, ultimately halving the House’s ask.
Additionally, lawmakers look as if they will settle on naming the pot of dollars the “Inflation Fund.” House leadership had initially named it the Budgeting for Inflation that Drives Elevated Needs Fund, or “BIDEN Fund.” Democrats criticized that move, calling it petty politics to pin the high inflation rate on President Joe Biden.
The United States recently saw a 40-year-high level of inflation, with prices jumping 7.3% since January 2021.
“We are seeing, obviously, inflation going on nationally and within our state,” St. Augustine Republican Sen. Travis Hutson said last month. “We have contracts that are subject to an appropriation that were not contingent on some of the inflation we are seeing.”
The Senate version of the bill establishing the Inflation Fund still contains language blaming inflation on “unwieldy federal spending during the COVID-19 pandemic.” House Democrats have rebuked that characterization, arguing the pandemic has caused inflation worldwide.
More than half of House Democrats voted against the bill when it first passed that chamber 90-26 last month. A handful of Senate Democrats held out on the 35-4 vote when it passed that chamber on Wednesday.
As inflation remains high, Republicans are likely to continue to bash Biden and Democrats over the issue. A CBS News poll in January found 65% of respondents didn’t think Biden was focused enough on stemming inflation, and 58% said he wasn’t focused on the economy.
Lawmakers have until the end of Tuesday to finalize the budget in order to pass it by the scheduled end of Session. Senate budget chief Kelli Stargel and her House counterpart, Jay Trumbull, say the budget will be presented by that deadline.