State Budget Shortfalls — February 24, 2011
February 24, 2011
Note: Following states have updates: Colorado; Idaho; Michigan; North Carolina; Wisconsin. Changes are indicated in italics.
Highlights
Wisconsin protests exposes much deeper state budget crises. Public employees salaries and benefits are financially unsustainable. To gain control of state budget and develop priorities, the following questions should be answered:
-What is the role of government?
-What are the essential services the government must provide to fulfill its purpose?
-How will we know if government is doing a good job?
-What should all of this cost?
-When cuts must be made, how will they be properly prioritized?
Aolnews. Feb. 24, 2011. http://www.aolnews.com/2011/02/24/opinion-wisconsin-exposes-deeper-state-budget-crisis/
Illinois seeks to borrow $ 3.7 bill to shore up pension shortfall. Illinois continues to postpone the Day of Reckoning and the long-term financial problems grow. Washington Post. February 22, 2011. http://www.washingtonpost.com/wp-dyn/content/article/2011/02/22/AR2011022204011.html
Governors and Mayors are trying to limit the soaring cost of health benefits for millions of retired state and local workers. NY Times. February 13, 2011. http://www.nytimes.com/2011/02/14/business/14retirees.html?_r=2&pagewanted=print
Union-Negotiated Work Rules for Public Employees Cost Taxpayers Dearly. MacIver Institute. February 17, 2011. http://maciverinstitute.com/2011/02/union-negotiated-work-rules-for-public-employees-cost-taxpayers-dearly/
State Budget Reform Tool Kit: ALEC toolkit provides more than 20 recommendations to modernize state budgeting improve budget transparency, control costs and improve government efficiency.
K -12 Education .The problem federal stimulus funds caused. http://blogs.edweek.org/edweek/campaign12/2011/01/race_to_the_funding_cliff.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CampaignK-12+%28Education+Week+Blog%3A+Politics+K-12%29&utm_content=Google+Feedfetcher
- Possible solutions. http://edreformer.com/2011/01/3-budget-strategies-for-broke-states/
Governors, unions brace for battle. Stateline. January 28, 2011. http://www.stateline.org/live/printable/story?contentId=545699
PublicSectorInc.org Experts Rate the Governors. PublicSectorInc.com January 25, 2011. http://www.publicsectorinc.com/psi_articles/2011/01/publicsectorinccom-experts-rate-the-governors.html
Obama care accelerates a Medicaid meltdown.
-NY Times. January 28, 2011. http://www.nytimes.com/2011/01/29/us/politics/29medicaid.html
-Kaiser Health News. Jan. 30, 2011 http://www.kaiserhealthnews.org/Stories/2011/January/28/medicaid-maintenance-of-effort.aspx
-Governors’ Letter to Congress. January 24, 2011. http://www.nga.org/portal/site/nga/menuitem.cb6e7818b34088d18a278110501010a0/?vgnextoid=b990c07128cad210VgnVCM1000005e00100aRCRD
-Republican Governors ask Feds to ease healthcare mandates. January 2011. http://www.rga.org/homepage/gop-governors-ask-feds-to-ease-healthcare-mandates/
Latest budget projections
Arizona $763.6 million state budget shortfall through June 30, 2011 and another $1.2 billion for FY 2011. Governor’s Budget. January 2011
California. $25.4 billion through June 2012. Foxnews.com. January 22, 2011.
Colorado $1 billion. Timescall.com. February 20, 2011
Connecticut. $3.67 billion. The CT Mirror. January 25, 2011
Delaware $216.4 million. Delawareonline.com January 28, 2011
Florida $.3.6 billion. FOX NEWS.com February 1, 2011.
Georgia $1.5 billion. Savannahnow.com. February 6, 2011.
Hawaii -$71 million (FY 2010-11); $771 million (FY 2011-13). KITV.com. December 20, 2010.
Idaho-$92 million (FY 2011-12) Bloomberg.com. February 18, 2011
Illinois-$13 billion (FY 2010-11) WSJ. January 12, 2011
Iowa- $700 million (FY 2011-12). Bloomberg.com. December 22, 2010.
Kansas- $550 million (FY 2011-12). Kansascity.com. January 5, 2011
Louisiana $1.6 billion FOX 8. December 30, 2010
Maine- $840 million. The Portland Press Herald. November 27, 2010.
Maryland-$1.3 billion (FY 2011-12) Afro.com. January 27, 2011.
Massachusetts up to $1.5 billion. Telegram.com. Masslive.com January 17, 2011
Michigan $1.4 billion (FY 2011-12) Shootonline.com. February 20, 2011
Minnesota $6.2 billion Brainerd Dispatch.com. January 2, 2011
Mississippi $634 million. Thegovmonitor.com. November 16, 2010.
Missouri - $1 billion. Kansas City Business Journal. August 5, 2010.
Montana-$388 million (FY 2011-12). Bloomberg Businessweek. October 8, 2010.
Nebraska -more than $1 billion (FY 2011-13) Action3news.com. January 6, 2011
Nevada - State budget shortfall of $2.2 billion. Examiner.com. February 7, 2011
New Hampshire $800 million. Sentinelsource.com. September 22, 2010.
New Jersey $10.5 billion (FY 2011-12). Blogs.APP.Com. July 22, 2010.
New Mexico $452 million). Bloomberg Busineeweek.com. November 11, 2010.
New York $9 billion NY Times. January 1, 2011
North Carolina -$2.4 billion (FY 2011-12) and $2 billion (FY 2012-13) The TimesNews.com. February 20, 2011.
Ohio $4-8 billion (FY 2011-13) Ohio.com. January 1, 2011
Oklahoma $600 million (FY 2011-12) kfor.com. February 7, 2011
Oregon $3.5 billion (FY 2011-13). NRToday. November 23, 2010.
Pennsylvania $4 - 5 billion (FY 2011-12). The Philadelphia Inquirer. December 17, 2010.
Rhode Island $365 million (FY 2011-12)). WPRI.com. November 10, 2010.
South Carolina $829 million (FY 2011-12). GoUPstate.com. January 7, 2011
South Dakota -$32 million (FY 2011-12) $107 million (FY 2012-13). Yankton press. January 30, 2010.
Tennessee - $1 billion. WSMV.com. January 31, 2011
Texas -$15 billion. Chron.com. Jan. 18, 2011.
Utah-$700 million. KCPW. December 11, 2010.
Vermont-$112 million (FY 2012-13). 5WPTZ.com. August 22, 2010.
Virginia -$200 million (FY 2011-12). WashingtonExaminer.com. December 17, 2010.
Washington $600 million (FY 2000-11) $4.6 billion (FY 2011-13) www.governor.wa.gov. December 17, 2010.
West Virginia -$150 -$160 million (FY 2011-12). Charleston Gazette. June 7, 2010.
Wisconsin-$137 million (FY 2010-11) and 3.6 billion. (FY 2011-12). JSOnline.com. February 7, 2011.
Strained States Turning to Laws to Curb Labor Unions. NY Times. January 3, 2011. http://www.nytimes.com/2011/01/04/business/04labor.html
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.
Center on Budget and Policy Priorities believe 2012 is “shaping up at states’ most difficult budget year on record. Thus far some 44 states and the District of Columbia are projecting budget shortfalls totaling $125 billion for fiscal year 2012. January 21, 2011. http://www.cbpp.org/cms/index.cfm?fa=view&id=711
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 requests Medicaid wavier from feds to help solve state budget shortfall. AZcentral.com. January 22, 2011.
- Arizona $763.6 million state budget shortfall through June 30, 2011 and another $1.2 billion for FY 2011. Governor’s Budget. January 2011
California –Gov. Brown offers budget with $12.5 billion in cuts and $12 billion in tax increase. Governor used more than $5.4 billion in gimmicks. SFGate. January 12, 2011.
-California does not have funds available to pay more than $195 billion of the State’s commitments. Truthinaccounting.org. December 20, 2010.
-State faces $25.4 billion state budget shortfall through June 30, 2012. Foxnewscom. January 22, 2011.
Colorado-State faces $1 billion state budget shortfall in FY 2011-12. TimesCall.com. February 20, 2011.
Connecticut—State budget shortfall of $3.67 billion and Governor is proposing $2 billion in spending cuts and $1.7 billion in new revenue. The CT Mirror. January 25, 2011
Delaware-$216.4 state budget shortfall for FY 2011-12. Delawareonline.com. January 28, 2011.
Florida-State budget shortfall of $3.6 billion for FY 2011-12. FoxNews.com. February 1, 2011.
-Governor Scott announces plans to cut $2 billion in tax cuts; $5 billion in spending cuts; eliminate 9,000 positions; and reduce Medicaid by $4 billion. WUSF. February 7, 2011.
Georgia- Prison system reform will focus on sentencing alternatives. Watchdog.org. February 17, 2011.
-State budget shortfall of $1.5 billion for FY 2012. Savannahnow.com. February 6, 2011.
Hawaii-State budget shortfall of $71 million for FY 2010-11 and $771 million for FY 2011-13. KITV.com. December 20, 2010.
Idaho-State budget shortfall of $92 million for FY 2011-12. Bloomberg.com. February 18, 2011.
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
-Indiana saving funds by implementing corrections reform. NY Times. January 17, 2010.
Illinois –Governor proposes nearly $1 billion in agency cuts but wants to increase state spending by $1.7 billion. Proposal includes borrowing $8.7 billion to pay outstanding state bills to solve $13 billion state budget shortfall. Wthitv.com. February 15, 2011.
-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
Iowa-State faces state budget shortfall of $700 million for FY 2011-12. Bloomberg.com. December 22, 2010.
Kansas-State budget shortfall of $550 million for FY 2011-12. Kansascity.com. January 5, 2011.
Kentucky –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.
Maryland –Governor proposes to close 1.3 billion state budget shortfall for FY 2011-12 with $1 billion in spending cuts, pension reform and hundreds of millions of dollars in accounting gimmicks. The pension reform will require current workers to contribute an additional two percent toward their benefits while new workers would have to wait five extra years to retire. Total state spending will rise by $1.5 billion. AFRO.com. January 27, 2011.
Massachusetts-State budget shortfall of up to $1.5 billion. Masslivecom. January 17, 2011.
Michigan-State faces a $1.4 billion state budget shortfall for FY 2011-12. Shootonline.com February 20, 2011
Minnesota—Governor vetoes $901 million in proposed budget cuts. StarTribune.com. February 11, 2011.
-State budget shortfall of $6.2 billion. Brainerd Dispatch.com. January 2, 2011.
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 more than $1 billion for FY 11-13 budget. Action3news.com. January 6, 2011
Nevada-State budget shortfall of $2.2 billion. Examiner.com. February 7, 2011
New Hampshire –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-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 -Empire Center points out critical need for limits on spending and property to solve New York’s potential $10 billion state budget shortfall. Timesunion.com. January 3, 2011.
-Governor-elect Cuomo says no tax hikes; will cut schools, health to solve $9 billion state budget shortfall. WSJ November 9, 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 a $2.4 billion state budget shortfall FY 2011-12 and $2 billion for FY 2012-13. TheTimesNews.com February 20, 2011
North Dakota- State is forecasting a $696 million surplus for the fiscal year ending June 30, 2011. Inforum.com. September 22, 2010
Ohio-Senate Republicans move to wipe out collective bargaining for all state workers including higher education. Columbus Dispatch.com. February 9, 2011.
-State Budget shortfall $8 billion. NPR. January 26, 2011
Oklahoma-State faces $600 million state budget shortfall for FY 2011-12. Kfor.com. February 7, 2011.
Oregon-State budget shortfall for FY11-13 is now $3.5 billion. NRToday. November 23, 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 –State budget shortfall of $829 million. GoUpstate.com. January 7, 2011
South Dakota-$32 million state budget shortfall for FY 2011 and $107 million for FY 2012. Yankton press. January 30, 2010.
Tennessee–$1 billion state budget shortfall for FY 2011-12. WSMV.com January 31, 2010.
Texas –House Republicans propose widespread cuts to eliminate a $15 billion state budget shortfall for FY 2011-12. The proposal assumes that legislators will not increase taxes or dip into the rainy day fund. Chron.com. Jan.18, 2011
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.
Virginia-State budget shortfall of less than $200 million for FY 2011-12. Washington Examiner.com. December 17, 2010.
Washington –Senate approves plan to address $375 million of $550 million state budget shortfall for current year (FY 2010-11) by a combination of budget cuts and raiding money from other dedicated funds. News Tribune. February 5, 2011.
House Democrats approve $222 million in spending cuts and $124 million in accounting gimmicks (fund transfers, etc) to partially patch a $550 million state budget shortfall for FY 2010-11. Bloomberg.com. Jan. 25, 2011
-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 $137 million state budget shortfall FY 2010-11) and $3.6 billion (FY 2011-12). JSOnline.com. February 7, 2011.
Governor Walker released his plans on February 11, 2011, to take on the public employee unions.
-Limit the total wage increases for union public employees to the rate of inflation, unless voters approve the increase by referendum. The proposal requires unions to take a yearly vote to maintain their status as a union and prohibits public employers from collecting union dues for unions. During his campaign, Walker received endorsements from the Wisconsin Troopers’ Association and the unions representing Milwaukee cops and firefighters, which would be exempted from those changes, as well.
-Require state employees to contribute 5.8% of their pay to their pensions. • The proposal also requires state workers to pick up at least 12.6% of the cost of their health care premiums and trims overall benefits in health plans.
-Make civil service positions such as chief legal counsel, public information officer and legislative liaison into political appointments. This could potentially allow Walker to fill positions held by holdovers from the Doyle administration with Walker’s own picks
http://www.jsonline.com/news/statepolitics/115726754.html
