State budget shortfall -December 27, 2010
December 27, 2010
Note: Following states have updates: Arizona; California; Connecticut; Hawaii; Iowa; North Carolina; Ohio; and Virginia. Changes are indicated in italics.
Latest budget projections
Arizona $2.25 billion deficit through June 30, 2012.
CAL. $25 billion next 18 months
Colorado $1.1 billion
Conn. $3.5 billion
Delaware $278-342 million
Florida $.3.5 billion
Georgia $ more than $1 billion
Hawaii -$71 million (FY 2010-11); $771 million (FY 2011-13)
Idaho-$340 million
Illinois-$14 billion
Iowa- $700 million (FY 2011-12)
Louisiana $1.6 billion
Maine- $840 million
Maryland-$1.6 billion (FY 2011-12
Massachusetts $2 billion
Michigan $1.7 billion (FY 2011-12)
Minnesota $6.1 billion
Mississippi $634 million
Missouri - $1 billion
Montana-$388 million (FY 2011-12)
Nebraska $986 million (FY 2011-13)
Nevada $1.1- 3.0 billion
New Hampshire $800 million
New Jersey $10.5 billion (FY 2011-12)
New Mexico $452 million)
New York $9 billion
North Carolina -$3.7 billion (FY 2011-12)
Ohio $10 billion or more
Oklahoma $1.2 billion (FY 2011-12)
Oregon $3.5 billion (FY 2011-13)
Pennsylvania $4.5 billion (FY 2011-12)
Rhode Island $365 million (FY 2011-12))
South Carolina $800 million (FY 2011-12)
South Dakota -$32 million (FY 2011-12) $107 million (FY 2012-13)
Texas -$25 billion
Utah-$700 million
Vermont-$112 million (FY 2012-13)
Virginia -$200 million (FY 2011-12)
Washington $600 million (FY 2000-11) $4.6 billion (FY 2011-13)
West Virginia -$150 million (FY 2011-12)
Wisconsin-$3.3 billion
Wyoming- $300-325 million
“60 Minutes” shows “the day of reckoning is at hand” http://www.cbsnews.com/8301-504803_162-20026124-10391709.html?tag=contentMain;contentBody. December 19, 2010.
State Face Budget Shortfalls of $26.7 billion in current fiscal year. WSJ. December 8, 2010.
Public Pension Cost Cover-up? The Union Effort to Kill Transparency. Biggovernment.com. December 20, 2010.
Bailouts or Bankruptcy for State and Local Government Pension Problems? Enterprise and Free Markets. December 15,2010.
There will be 29 new governors! Republicans has a net gain of six Governors. NCSL.org November 10, 2010. Republicans made historic gains by adding over 675 legislative seats. NCSL.org. November 10, 2010
New state GOP leaders itching to get started. Statelineorg. November 9, 2010
Some states weight unthinkable option: ending Medicaid. WSJ. November 22, 2010http://online.wsj.com/article/SB10001424052748704444304575628603406482936.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsTop
Pensions and Retirees Health Care:
1. The Center for State and Local Government Excellent has created an interactive map showing a sample of state and local governments that have negotiated changes in pension plans. Center for State & Local Government Excellence. November 15, 2010
2. The Rollback on public pay and pensions begins. Investors.com. November 10, 2010
3. Dire outcome predicted for municipal pension systems. Cities and counties could add $574 billion to the $3 trillion in unfunded liabilities for the states. Kellogg School of Management. October 12, 2010. http://www.kellogg.northwestern.edu/News_Articles/2010/municipal-pension-systems.aspx
4. NCSL September 1, 2010. http://www.ncsl.org/?TabId=20836.
5. States cutting public sector retirees benefits. http://www.google.com/hostednews/ap/article/ALeqM5gvkRQqiPV1eRXDaSrTWohTaZY3igD9I87UJO0.
6. Amid backlash and budget deficits, government workers’ pensions are targets. Washington Post. October 6, 2010. http://www.washingtonpost.com/wp-dyn/content/article/2010/10/05/AR2010100506187.html
7. The “Build America” Debt Bomb masks real financial situation of state and local governments. WSJ. November 22, 2010.
State burden per capita for public debt. This does not included unfunded pension and retiree health care obligations; unemployment insurance loans from the federal government; etc. CNNMoney.com. October 3, 2010.
CATO released its “Fiscal Policy Report Card on America’s Governors: 2010” http://www.cato.org/pub_display.php?pub_id=12173. September 30, 2010NY Post analysis finds that “major city infrastructure projects undertaken as past of the federal stimulus package have yet to generate even a fraction of the thousands of promised jobs. NY Post. September 6, 2010.
States can no longer dodge the budget axe. WSJ. August 17, 2010. Given for rehiring, schools wait and see. NYT August 18, 2010
Center on Budget & Policy Priorities projects that the states will face a cumulative state budget shortfall of $140 billion in the coming year. This number is grossly inflated due to the manner in which the Center calculates shortfalls- (the difference between what Governors want to spend and the previous budget). It is not the difference between the previous budget and the revenue forecast for the next budget. Center on Budget & Policy Priorities. June 29, 2010.
Reset (downsize) Government. The good news is that more and more states are recognizing the need to significantly downsize government. The bad news is that few states other than Indiana have taken the action necessary to “reset” spending. A recent report by the National Governor’s Association states that states will face budget deficits totally $134 billion over the next three years. Vermont Gov. Jim Douglas said, “The worse is probably yet to come.
The National Governors Association and National Association of State Budget Officers released their Fiscal Survey of the States on June 3.
1. Complete report: http://www.nga.org/Files/pdf/FSS1006.PDF
2. Press release on report: http://www.nga.org/portal/site/nga/menuitem.6c9a8a9ebc6ae07eee28aca9501010a0/?vgnextoid
3. Proposed FY 2011 spending is $52 billion less than FY 2008. http://www.nga.org/Files/pdf/FSS1006CHARTSPENDING.PDF. NOTE THIS IS GROSSLY OVERSTATED. IN YOUR STATES GET THE TOTAL ALL FUNDS SPENDING. GENERAL FUND- STATE SPENDING MAY HAVE BEEN CUT, BUT IN MOST STATES THEY USED OTHER FUNDS. BORROWED MONEY AND FEDERAL STIMULUS FUNDS TO ACTUALLY INCREASE SPENDING.
4. State budget gaps. http://www.nga.org/Files/pdf/FSS1006CHARTSPENDING.PDF/ Same comment as 3 above plus in many cases the “closed budget gaps” is the difference between what governors wanted to spend and the revenue forecast - it had nothing to do with the current budget vs the previous budget Request total general fund spending and total all funds spending for last budget; current budget and next years’ budget and do your own analysis. .http://www.nga.org/Files/pdf/FSS1006CHARTBUDGETGAPS.PDF
5. The State Fiscal Situation: The Lost Decade. http://www.nga.org/Files/pdf/0911FISCALLOSTDECADE.PDF
6. Webcast video: http://millercenter.org/scripps/archive/forum/detail/5700
Legislators of both parties allow bureaucrats to report a budget shortfall as the difference between what the governor wants to spend (not the current budget) vs the revenue forecast. We have not found any state that reports a shortfall as the difference between the current level of spending and the revenue forecast. Thus, most shortfalls are highly inflated.
Unemployment Insurance: Unemployment insurance and the amounts that states are borrowing from the federal government will be a big issue for many states over the next few years. The U. S. Department of Labor in their July 2010 Unemployment Insurance Outlook stated:
1. “Outlays from state trust funds accounts are projected to exceed revenues and interest income by $27.48 billion in FY 2010 and $18.09 billion in FY 2011.”
2. “State trust fund account balances, net of loans, are projected to continue to fall, from $3.2 billion at the end of FY 2009 to -$60.9 billion at the end of FY 2013, before starting to grown again. Net balances are not projected to become positive again until well beyond 2015.”
3. “Very large amounts of borrowing from the Federal Unemployment Account (FUA) are projected over the next few years. The balance of outstanding loans is projected to increase from $17.4 billion at the end of FY 2009 to a peak end-of-the-year balance of $65.2 billion in FY 2013.This peak balance is almost $30 billion less than projected for the Presidents budget. A total of 35-40 states are expected to borrow.”
Alabama-$600 million state budget shortfall for the 2011 budget solved by using federal funds and the state’s rainy day funds. The Institute for Southern Studies. May 22, 2010.
Arizona-State faces up to a $2.25 billion state budget shortfall through June 30, 2012. AZ central.com. December 26, 2010.
California –California does not have funds available to pay more than $195 billion of the State’s commitments. Truthinaccounting.org. December 20, 2010.
-California leaders offering false budget choices to address state budget shortfall. Publicsectorinc.com. December 19, 2010.
-State budget shortfall of $6.1 billion for current budget (FY 2010-11) and $19.4 billion for FY 2011-12. Californiahealthline.org. December 10, 2010.
Colorado-State faces $1.1 billion state budget shortfall in FY 2011-12. Denver Post. September 26, 2010.
Connecticut—State budget shortfall of $3.5 billion and Governor-elect is proposing tax increases to solve part of the problem. AP. December 20, 2010.
Delaware-$278 to $342 million state budget shortfall. Do Delaware online. January 10, 2010
Florida-State budget shortfall of at least $3.5 billion for FY 2011-12. TBO.com. December 19, 2010.
Georgia- Estimated state budget shortfall of more than $1 billion for FY 2012. Talkgwinnett.net. November 19, 2010.
Hawaii-State budget shortfall of $71 million for FY 2010-11 and $771 million for FY 2011-13. KITV.com. December 20, 2010.
Idaho-Estimated state budget shortfall of $340 million for FY 2011-12 budget. KIDK.com. November 19, 2010
- State delays payments to hospitals and nursing homes in order to meet state budget shortfall. Times-News Magic Valley.com. March 28, 2010
Indiana –Indiana ended fiscal year 2009-10 on June 30, with a balance budget but reserves have dropped to $830 million as of June 30. State Auditor is forecasting reserves will drop to $188 million by June 30, 2011. NWI.com. July 19, 2010
Illinois –State Senate debates $4 billion borrowing to cover upcoming pension payment. State has a state budget shortfall of $14 billion. The Huffington Post. November 10, 2010.
-State and local unfunded pension liability is more than $200 billion. Chicagotribune.com. August 13, 2010.
-NCSL reports Illinois has worse financial situation of all the states; however, total state spending is up 15.1 percent!!! WBEZ91..5 July 27, 2010
–Why Illinois’ budget is broken and what to do about it? Illinois Policy Institute. April 21, 2010. Illinois Policy Institute released a Policy Brief on how to solve the state’s $83 billion unfunded pension liability and state budget crisis. Illinois Policy Institute. January 10, 2010.
Iowa-State faces state budget shortfall of $700 million for FY 2011-12. Bloomberg.com. December 22, 2010.
Kansas-State expects $179 million from federal stimulus legislation. Bloomberg Businessweek. August 13, 2010.
-Raised taxes by $314 million including Increasing sales tax by 1 cent and raising unemployment taxes by $163 million to eliminate state budget shortfall. However, total general fund spending is UP (INCREASED) by 3.8 percent or $204.5 million. Total all funds spending is UP (INCREASED) BY MORE THAN 5 percent. Kansas Reporter. May 11, 2010.
Kentucky –Key Kentucky state worker pension fund in distress. Courier-Journal. August 29, 2010.
-Gov. Vetoes 19 parts of state budget designed to eliminate state budget shortfall. Governor must make $131 million in cuts in FY 2010-11 and $168 million of cuts in FY 2011-12. Kentucky.com. June 5, 2010.
Louisiana-State budget shortfall of $1.6 billion for FY 2011-12. KPLCTV.com. December 12, 2010.
Maine-State budget shortfall of $840 million for next budget. The Portland Press Herald. November 27, 2010.
-Maine has over a $2 billion unfunded liability for public employee’s retiree health care costs. Maine Watchdog. June 16, 2010.
Maryland –Maryland is expected to have a $1.6 billion state budget shortfall for FY 2011-12. Washington Post. November 11, 2010.
Massachusetts-State budget shortfall of up to $2 billion. Telgram.com.. December 14, 2010.
Michigan-State faces a $1.7 billion state budget shortfall for FY 2011-12. WashingtonExaminer.com. December 18, 2010.
-The Paying Class vs. the Government Class. Mackinac Center. May 3, 2010.
Minnesota—State budget shortfall of $6.1 billion. Duluth News Tribune. December 17, 2010.
Mississippi- State faces $634 million state budget shortfall for FY 2012. thegovmonitor.com. November 16, 2010.
Missouri-State faces $1 billion state budget shortfall for FY 2012. Kansas City Business Journal. August 5, 2010.
Montana-State faces $388 million state budget shortfall in FY 2011-12 budget. Projected surplus this year of $236 million will help offset this shortfall. Bloomberg Businessweek. October 8, 2010
Nebraska –State budget shortfall of $986 million for FY 11-13 budget. Omaha.com. December 17, 2010
Nevada-Pensions contributions to increase, unfunded liability climbs to $10 billion. Nevada News Bureau. November 10, 2010.
Budget director says major changes needed to fund government services and eliminate an estimated $3 billion state budget shortfall in FY11-12 budget. ThisisReno.com. August 10, 2010.
Many legislators unaware of tax increase they voted for –to extend higher sales tax for road work indefinitely. Las Vegas Review-Journal. May 17, 2010
-State closes a 22 percent state budget shortfall by reducing spending for most agencies by 10 percent; result in four-day work weeks of 10 hours a day for most state workers. Legislature also hiked fees totaling $50 million. Stateline.org. March 1, 2010
New Hampshire –State Retirements system approves shell game to remove part of their budget from legislative oversight. NewHampshireWatchdog.org
-State faces $800 million state budget shortfall. Sentinelsource.com. Sept. 22, 2010.
–A new way on retiree health care costs. Stateline.org. May 12, 2010
New Jersey-Governor promises “serious reform” on pensions. Watchdog.org6463. September 7, 2010.
-SEC charges NJ with securities fraud for not disclosing to municipal bond investors that it was underfunding its pensions. Reuters. August 18, 2010.
-State faces $10.5 billion state budget shortfall for FY 2011. APP.Com. July 22, 2010.
-Governor signs budget that will reduce state spending for the third year in a row. The total state budget is now at roughly the same level it was in 2005. Pensions were underfunded by $3 billion. NJ.com. June 30, 2010. Governor vetoes three bills. Result will save taxpayers $132 million. Government monitor. July 24, 2010.
New Mexico-State budget shortfall grows to $452 million. Bloomberg Businessweek.com. November 11, 2010.
New York –Gov. Patterson calls special session for Nov.29 to address $315 million state budget shortfall in current year’s budget. New York Daily News. November 24, 2010
Governor-elect Cuomo says no tax hikes; will cut schools, health to solve $9 billion state budget shortfall. WSJ November 9, 2010.
–Manhattan Institute release study showing NY taxpayers have a $205 billion unfunded liability for retired state and local government employees. Empire Center. October 13, 2010
-Legislators agree on budget, four month late to solve state budget shortfall. This included raising roughly $1 billion by increasing taxes on the sale of clothing and on a variety of businesses. NYTimes August 3, 2010.
—State Comptroller points out that despite the state budget shortfalls, state spending was increased $9.6 billion or 7.6% over the previous budget. The Senate still has not voted on the revenue part of the budget! Comptroller points out that a midyear budget deficit is possible due to budget gimmicks. Democrat and Chronicle. Com. July 15, 2010.
North Carolina – State faces more than a $3 billion state budget shortfall in next budget. Winston-Salem Journal.com. December 19, 2010.
North Dakota- State is forecasting a $696 million surplus for the fiscal year ending June 30, 2011. Inforum.com. September 22, 2010
Ohio-National Health Care Law threatens to make Medicaid an unsustainable burden for Ohioans. Buckeye Institute, December 2010
-State budget shortfall $10 billion or more. Cleveland.com. December 24, 2010.
Oklahoma-The coming explosion of Oklahoma’s pension bomb. OPAThink.org. page 10. October 10, 2010.
-Democrat Governor, GOP leaders announce budget deal to solve $1.2 billion state budget shortfall for the fiscal year beginning July 1. State spending will be reduced by about 7.6 percent; AP. May 21, 2010.
Oregon-State budget shortfall for FY11-13 is now $3.5 billion. NRToday. November 23, 2010.
- Hard Choices: Oregon governor, Legislature face grim menu on worker pay. Oregonian. October 24, 2010.
-Hard Choices; Oregon State worker pay is a pivot point for budget showdown. Oregonian. October 23, 2010.
-Gov. Ted Kulongoski says recession forces Oregon state government to rethink how it operates. Oregonian, June 24, 2010. Some amazing recommendations from a liberal governor:
-Gov. called for reducing state worker benefits, shortening some mandatory sentences for criminals and making schools more accountable for the state money they spend. He called for state employees to pick up a portion of their pension and health insurance costs.
-some interesting quotes from Gov. Kulongoski.
-“The current structure of state government is simply not sustainable anymore.”
-“Increasing labor costs will be a big contributor to future deficits if we do not change the way we budget and provide compensation for public employees”
-“Add health care costs to retirement costs and we will soon be looking at benefit increases for public employees that far exceed the increases to pay and benefits projected for their private sector counterparts.”
-Governor’s Reset Cabinet released preliminary report which forecasted a decade of deficits unless corrective action was taken next year. Governor’s Reset Cabinet. May 2010.
Pennsylvania –State budget shortfall of $4-5 billion for FY 2011-12. The Philadelphia Inquirer. December 17, 2010.
Rhode Island – State budget shortfall for FY 2011-12 estimated at $365 million. WPRI.com. November 10, 2010
South Carolina –Governor vetoes 107 line-items and provisos in the state budget including counting on federal medical funds that may or may not come. State budget shortfall for 2011-12 is now projected at $1 billion. Thegovmonitor. June 10, 2010
South Dakota-$32 million state budget shortfall for FY 2011 and $107 million for FY 2012. Yankton press. January 30, 2010.
Tennessee–Legislature passes budget to eliminate a $1.5 billion state budget shortfall. Tennessean.com. June 5, 2010
Texas –Texas borrows $1.1 billion to repay U.S. for jobless benefits. Bloomberg.com. November 18, 2010.
-State budget shortfall of $25 billion. Dallasnews.com. December 16,2010.
Utah- $700 million state budget shortfall. KCPW December 11, 2009.
Vermont—Governor & Legislative leaders agree the state could face a $112 million state budget shortfall for fiscal 2012-13. 5WPTZ.com. August 22, 2010.
-State budget shortfall of $150 million for the current year. could be $1 billion over the next four years. Brattleboro Reformer.
Virginia-State has $17.6 billion unfunded pension liability and needs a 44% return on investment just to maintain the status quo. Gov. Bob McDonnell. December 17, 2010.
-–State budget shortfall of less than $200 million for FY 2011-12. Washington Examiner.com. December 17, 2010.
Washington –State budget shortfall of $1.1 billion for current fiscal year. Legislature passed supplemental budget on December 11 to solve $588 million. Governor proposes an additional supplemental budget to solve remaining deficit – but it includes not paying $253 million to school districts until the next fiscal year begins on July 1, 2011. www.governor.wa.gov. December 17, 2010.
West Virginia –Legislators want stimulus answers. Charleston Gazette. August 10, 2010
-$150 -160 million state budget shortfall in FY 2011-12 budget. Charleston Gazette. June 7, 2010.http://sundaygazettemail.com/News/201006070756
Wisconsin-State faces $3.3 billion state budget shortfall. Examiner.com. November 22, 2010.
Wyoming-$300-325 million state budget shortfall. Trib.com April 2, 2009
