State Budget Shortfalls — July 14, 2011
July 14, 2011
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 and in most cases are the results of overspending in previous years.
Only Minnesota (governor vetoed budget and is demanding tax increases) has not passed a budget.
Updates this week: Connecticut; Illinois; Minnesota; Texas
Connecticut: Layoff notices go out to state workers; more to come. “What we are doing is finalizing, on a department-by-department basis,” Malloy said on July 12. “Larger and larger and larger number of employees will begin to receive their notices, starting today.” Courant.com. July 12, 2011.
Illinois: Several dozen union workers gathered at a downtown state office building this afternoon to protest Gov. Pat Quinn’s decision to block raises for 33,000 employees, alleging he is illegally violating their contract. Quinn says he is following the law by not issuing the pay hikes, saying legislators did not set aside enough money to fund the increases but also keep government operating for a full year. “The money wasn’t there,” Quinn said at an unrelated event today. Chicagotribune.com. July 12, 2011.
Minnesota: Gov. Mark Dayton said Thursday morning that he is willing to accept Republicans’ June 30 budget offer, which would close a $1.4 billion budget difference by delaying payment of school funds and borrowing against the state’s tobacco settlement. “This is the only viable option that’s potentially available,” Dayton said. SBS believes this budget is full of gimmicks and is financially unsustainable but with the current Governor it may be the only viable option to end the government shutdown. Dayton said his acceptance was contingent on Republicans’ dropping all controversial policy positions as well as the push to cut 15 percent of the state’s work force and the passage of a $500 million bonding bill.
· The GOP offer had two primary components. The state would drive down the deficit $700 million by increasing the amount of deferred school payments. It would then borrow from future tobacco settlement payments, which Dayton said Thursday would net $700 million.
· “Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” Dayton wrote to legislative leaders. “Therefore I am willing to agree to something I do not agree with — your proposal — in order to spare our citizens and our state from further damage.” Dayton said if Republicans agree, commissioners and staff are prepared to meet “around the clock” to wrap up the budget. A special session could occur within three days, he wrote. Startribune.com. July 14, 2011.
Texas: State agencies have begun laying off employees, with almost 6,000 jobs expected to be lost in the current two-year budget cycle. UPI.com. July 13, 2011.
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. http://www.alec.org/AM/Template.cfm?Section=State_Budget_Reform_Toolkit&Template=/CM/HTMLDisplay.cfm&ContentID=15218
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/
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 deficit projections
Minnesota $5.03 billion (FY 2012-13), Twin Cities Daily Planet. March 3, 2011.
New York $2 billion (FY 2012-13)
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. 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
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
Alabama-A $1.8 billon General Fund budget approved by the Alabama Senate on April 7 will require most agencies, except prisons and Medicaid, to get by on less money and will wipe out funding for many museums and tourist attractions. The budget provides no raises for state workers and is based on them paying more for retirement and health insurance. But it will allow them to keep their yearly longevity bonuses and not have furloughs, although layoffs remain likely. Forbes.com. April 8, 2011.
Alaska- Legislature passes budget — about $9 billion total including about $7 billion in state funds. The compromise put more money toward Gov. Sean Parnell’s idea of paying for college scholarships for high-achieving high school graduates. A previous version of the operating budget had split $9 million in scholarship money between needs-based scholarships and Parnell’s merit scholarships, $4.5 million each. The final bill contained $6 million for Parnell’s plan and $3 million for needs-based assistance. Alaska Dispatch. May 4, 2011.
Arizona-Governor signed budget that eliminates state budget shortfall. Spending in the next fiscal would total $8.3 billion. That’s below the current year’s $8.5 billion and Brewer’s proposed $8.9 billion. The budget restored transplant coverage — eliminated amid much controversy last fall — as part of a major revamp of the state’s Medicaid program that also include enrollment freezes that would reduce the number of people in the program by about 138,000 over the next year. Other elements of the plan include proposed new fees for smokers and obese people who don’t work with their physicians and meet goals. The changes would save the state a projected $500 million to help close a $1.1 billion budget shortfall. Arizona Republic. April 8, 2011.
Arkansas- The Arkansas House gave final approval Friday to a $4.6 billion budget for the coming year that increases spending for public schools and prisons but keeps state workers’ salaries flat. On a 74-13 vote, the House gave final approval to the Revenue Stabilization Act, which sets spending priorities for the coming year based on expected revenues. It now heads to the governor’s desk. The centerpiece of the tax cut package was a half-cent reduction in the grocery tax advocated by Beebe. The cut, which takes effect July 1, is expected to cost the state nearly $21 million in the coming year and will reduce the rate from 2 percent to 1.5 percent. Beebe had initially told lawmakers that the grocery cut was the only one the state could afford, but later agreed to other cuts — including a used car sales tax cut and an annual sales tax holiday — in a compromise with the Legislature. In order to help pay for the additional tax relief, Beebe dropped a proposal to grant state employees a 1.86 percent cost-of-living raise and instead kept their pay flat. Beebe also reduced his spending proposals for most state agencies. Arkansas online. April 2, 2011
California – Lawmakers approve state budget that closes a nearly $10 billion shortfall by using accounting gimmicks (i.e. an addition $4 billion in a rosy revenue forecast, deferring payments to schools, and issuing $5 billion in debt to cover cash flow). Budget will cut from universities, courts and the poor, shutter 70 parks. LATimes.com. June 29, 2011
- U.S. Supreme Court orders (5-4 vote) California to reduce its prison population by more than 30,000 inmates. NYTimes.com. May 23, 2011.
Colorado- Governor Hickenlooper signed the budget compromise bill on May 6 to help cover a $1 billion state budget shortfall. Colorado.gov. May 6, 2011. Final compromise included diverting tobacco funds to any health care program (SJR 11-009) increasing employee contributions to pensions by 2.5 percent and decreasing employer contributions by 2.5%. UCdenver.edu. May 9, 2011.
Connecticut—Layoff notices go out to state workers; more to come. “What we are doing is finalizing, on a department-by-department basis,” Malloy said on July 12. “Larger and larger and larger number of employees will begin to receive their notices, starting today.” Courant.com. July 12, 2011.
- Legislature, meeting in special session, gave Gov. Malloy only a portion of the additional authority he sought to cut $1.6 billion from the budget. “Our goal has been achieved: Connecticut has a budget in place that is balanced honestly, with no gimmicks,” Malloy said in an emailed statement. “To be clear, that’s not a reason to celebrate. The $1.6 billion deficit we just closed involves a lot of pain for a lot of people in the form of thousands of layoffs and deep spending cuts.” The legislators are gambling that SEBAC, the coalition of state employee unions, can deliver on its promise to salvage concessions voted down last week in voting by individual unions. SEBAC’s board has delayed indefinitely what was expected to be a pro forma acceptance of those votes. It is to meet again today. “If they choose to ratify the agreement that was recently turned down, and if they do so in a timely fashion, much of the pain that’s been inflicted over the past few days can be reversed,” Malloy said. “If they end up not ratifying the agreement, then the budget we now have in place is the one we’ll live with for the next two years.”CTMirror.org. July1, 2011.
-The alternative budget bill – which includes $1,376,577,207 in cuts from the General Fund and $225,371,050 in cuts from the Special Transportation Fund over the next two fiscal years, reduction of the earned income tax credit from 30 percent to 25 percent of the federal credit for qualifying Connecticut residents, and more rescission authority by the governor until September 30, 2011, among other things – was passed by the state House of Representatives by 78-56, and was later passed by the state Senate by 21-14. Connecticutpus.com. July 5, 2011.
- Special legislative session to start on June 30. Gov. Dannel P. Malloy has recommended nearly 5,500 state employee layoffs, elimination of 1,000 other vacant positions and a $54 million cut in municipal aid to help offset the unrealized savings from the failed union concession deal. It was unclear from limited details released on June 28 how much savings could be achieved over the next two fiscal years from the 6,466 recommended job cuts. Malloy spokeswoman Colleen Flanagan wrote that commissioners and other agency heads will be charged with finding the $700.7 million in savings needed to balance finances in the $20.14 billion budget for the fiscal year that starts July 1, and another $901.2 million in the $20.4 billion budget for 2012-13. The Malloy plan likely would hinge on state legislators granting his request for expanded emergency budgetary authority. The governor technically can reduce most line items by up to 5 percent, though municipal aid is exempt, and many others cannot be touched because of contractual or other legal obligations. Malloy has asked lawmakers to boost the authority up to 10 percent, and to lift the exemption on town aid. With those powers, plus his existing authority to order layoffs, Malloy has said he believes he can close the fiscal holes created by the failed labor deal without any additional tax hikes. Ctmirror.org. June 28, 2011.
-Connecticut’s state workers, in voting results announced on June 24, rejected a deal meant to produce $1.6 billion in labor savings over two years, blowing a gaping hole in the state budget, raising the likelihood of thousands of layoffs and threatening chaos in a state that has largely avoided the rancorous labor issues seen elsewhere. NYTimes. June 24, 2011.
- The Senate approved a final package of budget adjustments that plugged a $400 million hole, canceled a controversial utility bill surcharge, and effectively granted advance approval to a $1.6 billion union concession deal. The budge now heads to Gov. Dannel P. Malloy, also would repeal a cabaret tax, restructure fare increases on the Metro-North commuter rail line, and implements a host of tax changes. Connecticutmirror. June 8, 2011
The new two-year $40.2 billion state budget actually increases government spending from $19.3 billion in 2011 to $20.3 billion in 2013, and pays for it with a $3.7 billion tax hike — the largest in Connecticut’s history. The governor’s 214-page budget bill actually included an astonishing 81 sections dedicated to raising existing taxes and instituting a wide array of new taxes. Among these are broad increases to income taxes, business taxes and sales taxes, along with the elimination of several sales tax exemptions. The proposal includes: higher income taxes; a sales tax increase from 6 percent to 6.35 percent; a 20 percent increase in the alcohol excise tax; a reduction in the property tax credit from $500 to $300; a 3 cent per gallon increase in the diesel fuel tax; a 7 percent luxury tax on cars over $50,000, boats over $100,000, jewelry over $5,000, and clothing over $1,000; a 20 percent surcharge on the corporation tax. Also under the proposal, clothing and footwear under $50 will be taxed for the first time, as will prescription drugs, pet grooming services, yoga studios, automotive storage, limousine services, automotive towing services, manicures and pedicures, airport valet parking services, cosmetic surgery services, spa services and online purchases. Regrettably, even with these taxes, the budget as passed still contained a $2 billion hole because it was passed in advance of the governor having achieved all of the labor concessions his plan relies on. Newstime.com. May 16, 2011.
Delaware- Lawmakers on June 29 sent Gov. Jack Markell a $3.5 billion budget to run the state for the next year, with one day to spare in this year’s legislative session. Delaware online.com. June 29, 2011
Florida- Governor Scott vetoes $615 million from state budget. Floridatoday.com. May 26, 2011. - Legislators settle on budget deal that covers $4 billion state budget shortfall. The agreement will require public employees across the state — including teachers, firefighters and sheriff’s deputies — to start paying 3 percent a year toward their pension costs. Gainesville.com. April 26, 2011.
Georgia- Gov. Nathan Deal signed an $18.3 billion budget on May 17 that increases health insurance premiums for state employees, slashes funding for Georgia’s college system and cobbles together money to go after tax cheats. The governor used his line item veto power to strike funding for 11 bond projects in the university system worth more than $40 million. Businessweek.com. May 18, 2011.
-Prison system reform will focus on sentencing alternatives. Watchdog.org. February 17, 2011.
Hawaii- Hawaii- Moody’s downgrades Hawaii’s General Obligation Bond Rating. HawaiiReporter. May 17, 2011. http://www.hawaiireporter.com/moody%E2%80%99s-downgrades-state-of-hawaii%E2%80%99s-general-obligation-bond-rating/123
-The Hawaii Legislature has passed a two-year state budget that aims to eliminate the state’s $1.3 billion projected state budget shortfall and pay for rising demand for government services. The budget approved May 3 totals $11 billion in the fiscal year that begins July 1 and $10.9 billion the following year. The general fund portion of the budget, over which lawmakers have the most control, amounts to $5.4 billion next fiscal year and $5.6 billion the following year. The budget relies on about $600 million in tax increases and another $600 million in cuts to Gov. Neil Abercrombie’s requests. Another $200 million comes from the state’s savings, most notably its hurricane relief fund. Businessweek.com. May 3, 2011.
Idaho The Joint Finance-Appropriation Committee (JFAC) adopted the Governor’s revenue estimate of $2,359.1 million and after legislative action and transfers to and from other funds that were approved during the 2011 session the ending balance is projected to be $39.4 million ($10.6 million lower than the Governor’s recommended ending balance). Other transfers for FY 2011 included: $30.1 million from the Budget Stabilization Fund; $48.8 million from the Economic Recovery Reserve Fund; $1,505,500 from other dedicated funds; and $1 million of General Fund was transferred to the Military Division for the Disaster Recovery Fund. The 2011 session included new legislation that provides for transfers from dedicated accounts to the General Fund to help balance FY 2012. These transfers included: $21.9 million from the Non-Endowed Millennium Fund, $8 million from the Liquor Control Fund, $7 million from the Permanent Building Fund, and $1 million from other dedicated funds. The Governor recommended and the Legislature concurred to continue two months of health insurance premium holiday for both the employer and employee. Both the two month premium holiday and any increase in the cost of benefits will be offset by the available health insurance reserves for FY 2012. The Legislature provided for an overall 2.2 % omnibus General Fund reduction for all agencies and departments. DFM.Idaho.gov. http://dfm.idaho.gov/Publications/BB/BudActivitySummary/BudSummary11/BudgetSummary.pdf
Illinois – Several dozen union workers gathered at a downtown state office building this afternoon to protest Gov. Pat Quinn’s decision to block raises for 33,000 employees, alleging he is illegally violating their contract. Quinn says he is following the law by not issuing the pay hikes, saying legislators did not set aside enough money to fund the increases but also keep government operating for a full year. “The money wasn’t there,” Quinn said at an unrelated event today. Chicagotribune.com. July 12, 2011.
-Employee salary shortfall looms in state budget. Governor Quinn’s options are limited. He signed an agreement with the American Federation of State, County and Municipal Employees union to not lay off employees or close facilities before June 30, 2012, the end of AFSCME’s current state contract. “There is not enough money in the budget to fully fund (salaries),” said Quinn budget spokeswoman Kelly Kraft. “This is something we continue to examine as we work to manage and implement an incomplete budget passed by the General Assembly.” Principal among the shortcomings, according to Senate Democrats, is that $150 million is being cut from general state aid to schools and more than $1 billion in Medicaid payments are essentially being pushed off for another year. Doing that was an alternative to cutting reimbursement rates to medical providers who treat Medicaid recipients. State Journal-Register. June 27, 2011.
-The Illinois Senate on May 30 sent a budget to Gov. Pat Quinn, but are holding out hope to spend a little more on education and social services. Senators approved the final pieces of a roughly $33.2 billion day-to-day operating budget that the House already had approved. But many senators were angry because they felt they had to swallow what was more or less the House budget done jointly by Speaker Michal Madigan, D-Chicago, and Minority Leader Tom Cross, R-Oswego. Chicagotribune.com. May 30, 2011. Without any changes, the size of the operating budget would be more than $2 billion less than the amount Quinn proposed spending in February
-Illinois’ budget deficit could surpass $9 billion, according to estimates in a report released Monday that criticizes Gov. Pat Quinn for artificially inflating the amount of money the state has to spend and contributing to an unbalanced budget that pushes the state’s problems into the future. The Civic Federation said Quinn’s proposed budget did not account for $971 million that the state should set aside to pay for anticipated income tax refunds and to clear a backlog of refunds to businesses that dates to 2008. That accounts for about $2.4 billion of the anticipated budget deficit in fiscal year 2012 when combined with a $1.45 billion budget gap caused by proposed new spending, the report said. The rest of the deficit comes from $4.6 billion in unpaid bills and $2.4 billion in Medicaid and insurance obligations — for a total estimated deficit of $9.4 billion. Pjstar.com. May 9, 2011. http://www.pjstar.com/free/x173163698/Study-Quinn-budget-plan-shows-deficit-topping-9B
-State and local unfunded pension liability is more than $200 billion. Chicagotribune.com. August 13, 2010.
Indiana – Governor Daniels signed $29 billion state budget on May 10. If state reserves exceed 10 percent of budgeted spending, half the extra money would be used for pension funds and half would be given back to taxpayers. The budget spends less than it takes in and leaves the state with $1 billion in reserves. It gives modest increases to public schools, though critics say the school funding formula included in the budget will hurt some districts, especially the smallest of Indiana’s school districts. Bloombergbusinessweek. May 11, 2011.
Iowa- The Iowa Legislature beat a midnight deadline with hours to spare on Thursday, finishing work on a $5.99 billion state budget and resolving a dispute over taxpayer money that could be used to pay for some Medicaid abortions. DesMoinesRegister.com. June 30, 2011.
Kansas- Legislature approved a $13.8 billion budget plan to fund state government in the next fiscal year. The package would erase a budget shortfall that at one point approached $500 million, and create a $50 million cash cushion on June 30, 2012, without raising taxes. 2.ljworld.com. May 13, 2011.
Kentucky –House adjourns expecting veto from Governor. MurrayLedger.com. March 28, 2011.
Louisiana- The $25 billion state operating budget is on its way to Gov. Bobby Jindal’s desk after the Louisiana House gave its final approval Tuesday, wrapping up the Legislature’s biggest order of business with two days remaining in the session. Nola.com. June 21, 2011.
- Gov. Bobby Jindal ordered a partial freeze Monday on state spending for travel, supplies, contracts and other operating services in most state government agencies for the remaining two months of the fiscal year. Jindal’s executive order was issued to help free up some money in state agencies that could be carried over to the next 2011-12 year to help lessen the blow of a more than $1 billion state budget shortfall. Forbes.com. May 9, 2011. http://www.forbes.com/feeds/ap/2011/05/09/business-us-louisiana-budget-spending-freeze_8457645.html
Maine- Governor LePage signs $6 billion state budget. Pressherald.com. June 20, 2011.
-House lawmakers gave preliminary approval on June 15 to a two-year, $6.1 billion budget for state government after rejecting attempts to change a compromise negotiated over several months by the budget-writing committee. The House voted 120-26 to send the budget bill to the Senate, which is expected to take it up for the first time later on June 15. The budget proposes to freeze and then cap at 3 percent the cost-of-living adjustment for state employees and retirees. But the 3 percent COLA would only apply to the first $20,000 of pension income. Bangordailynews.com. June 15, 2011-House lawmakers gave preliminary approval on June 15 to a two-year, $6.1 billion budget for state government after rejecting attempts to change a compromise negotiated over several months by the budget-writing committee. The House voted 120-26 to send the budget bill to the Senate, which is expected to take it up for the first time later on June 15. The budget proposes to freeze and then cap at 3 percent the cost-of-living adjustment for state employees and retirees. But the 3 percent COLA would only apply to the first $20,000 of pension income. Bangordailynews.com. June 15, 2011
-Changes to assumptions related to the state retirement system have added another $94 million to the expected budget shortfall for the next two years. The retirement system board recently changed demographic and economic assumptions used to generate estimated costs, according to Capitol News Service. The board changed the assumed inflation rate from 4.75% to 3.5% and changed the projected earnings rate on investments from 7.75% to 7.25%. Finance Commissioner Sawin Millet said the changed assumptions impact state appropriations for the public retirement system and the savings estimated to result from Gov. Paul LePage’s changes to the system. As part of the next two-year budget beginning July 1, LePage proposed requiring teachers and state workers to increase their contributions by 2 percentage points, reducing the state contribution, freezing cost of living increases for retirees for three years and capping future increases to 2% instead of 4%. Millet said lawmakers will meet this week to address a change package for the budget in light of the shortfall related to the retirement system and the projected $47 million revenue shortfall announced last week. Mainebiz. May 3, 2011.
Maryland – The Maryland General Assembly has enacted a $32 billion, balanced budget for the state, three days before the end of its 90-day legislative session. The new budget takes effect July 1, 2010. The final budget differs little from the version proposed by Governor Martin O’Malley in January. Its total is slightly less than the budget for the current year, whether measures in terms of total budget (0.9% reduction) or state general funds (0.3% reduction). The proposed budget leaves the state with a projected cash balance of $829 million at the end of fiscal year 2011. This includes the 5% “Rainy Day Fund” and $195 million in general fund surplus. Even so, projections for future years show shortfalls of $1.5 billion to $1.6 billion each year for 2012 through 2015. While the budget enacted by the legislature is balanced, it depends on payments from the federal Recovery and reinvestment Act, and on transfers from special funds. Only 86% of general fund expenditures are supported by ongoing revenues. Marylandpolicy.org. April 9, 2011.
Massachusetts- The Legislature approved the $30.6 billion budget on a 150-2 vote in the House and a 33-4 vote in the Senate, sending it to Governor Deval Patrick, who will have 10 days to review it and issue vetoes. Boston.com. July 1, 2011
The budget that will limit the collective bargaining rights of teachers, police officers, and firefighters in an effort to ease the cost of health insurance for cities and towns. Perhaps the most contentious proposal targets unions in an attempt to save cities and towns at least $100 million annually in health insurance costs. The budget includes no new taxes and instead cuts deeply across a range of state services, hitting the poor, the elderly, and the disabled. Patrick agreed to many of the cuts in his budget proposal released in January. Boston.com. July 1, 2011.
Michigan- New state budget on way to governor as Legislature passes $47.4 billion budget four months before the fiscal year begins on October 1. The plan cuts the state’s minimum per-pupil foundation allowance for public schools to $6,846, a drop of roughly 6 percent. That cut includes a $300-per-student reduction. There’s also a $170-per-student reduction that’s already on the books but was not felt this school year because the drop in state funding was filled with extra federal funds. State aid to universities will drop 15 percent across the board. Universities would lose more state aid if they don’t limit tuition increases to roughly 7 percent this fall. State aid to community colleges will drop by about 4 percent.The social safety net also takes a hit. Most able-bodied welfare recipients face a stricter four-year lifetime limit to receive benefits. Lansing State Journal. May 26, 2011.
Minnesota- Gov. Mark Dayton said Thursday morning that he is willing to accept Republicans’ June 30 budget offer, which would close a $1.4 billion budget difference by delaying payment of school funds and borrowing against the state’s tobacco settlement. “This is the only viable option that’s potentially available,” Dayton said. SBS believes this budget is full of gimmicks and is financially unsustainable but with the current Governor it may be the only viable option to end the government shutdown. Dayton said his acceptance was contingent on Republicans’ dropping all controversial policy positions as well as the push to cut 15 percent of the state’s work force and the passage of a $500 million bonding bill.
· The GOP offer had two primary components. The state would drive down the deficit $700 million by increasing the amount of deferred school payments. It would then borrow from future tobacco settlement payments, which Dayton said Thursday would net $700 million.
“Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” Dayton wrote to legislative leaders. “Therefore I am willing to agree to something I do not agree with — your proposal — in order to spare our citizens and our state from further damage.” Dayton said if Republicans agree, commissioners and staff are prepared to meet “around the clock” to wrap up the budget. A special session could occur within three days, he wrote. Startribune.com. July 14, 2011.-No deal on budget yet as July 1 government shutdown looms. Startribune.com. June 30, 2011
- Bipartisan budget panel releases blueprint for state budget solution that recommends 70% in cuts and 30% in tax increases. Startribune.com. July 7, 2011
- Talks imploded June 30 between DFL Gov. Mark Dayton and Republican legislative leaders in the final hours before a midnight budget deadline, and Minnesota began a historic government shutdown. The governor said his last offer would have raised income taxes only on those earning more than $1 million a year — an estimated 7,700 Minnesotans, or 0.3 percent of all taxpayers, according to the Revenue Department. The GOP proposed delaying another $700 million in payments owed to schools, which would add to the more than $1 billion the state already owes K-12 schools. Republicans also offered to issue “tobacco bonds” of an unspecified amount to cover any remaining budget gap. Sources said Dayton considered the offer, but he criticized it as unwise borrowing late Thursday. Startribune.com. July 1, 2011.
- Ramsey County Chief Judge Kathleen Gearin said she agreed with the governor that even if lawmakers and Gov. Mark Dayton do not resolve the budget by July 1 basic care for Minnesotans in prison, nursing homes, veterans home and state hospitals must be funded. She also decided that health care must be funded, computer system maintenance, internet security and other basic functions also must go on. But Gearin wrote that she had no authority to order funding beyond the basics. Startribune.com. June 29, 2011
-Republicans dropped their call for about $200 million in tax cuts in hopes they can avert a government shutdown and get DFL Gov. Mark Dayton to abandon his call for $1.8 billion in tax increases. “This is a major compromise,” said House Speaker Kurt Zellers, R-Maple Grove. Both he and Senate Majority Leader Amy Koch. R-Buffalo, said relinquishing the tax cuts, a bedrock campaign promise, was a tough move that some of their GOP colleagues do not support. However, DFL Gov. Mark Dayton adamantly rejected Republicans’ budget offer, calling it a non-offer and “extremely, extremely disappointing.” Republicans dropped their tax cut proposal Thursday but offered no more money for state programs, moving their bottom line no closer to Dayton. The governor called it one of the most disappointing moments of the session. “Once again their position, implicitly is I have agree entirely with them. I have to give up 100 percent of everything I believe in and am convinced is right for the people of Minnesota and cave in to their offer or there’s not going to be a deal,” Dayton said. “It is so irresponsible.” He said the day’s lack of movement brings the state ever closer to shutdown. Republicans have accused him of wanting a shutdown and he Thursday said he didn’t see Republicans making any moves to avoid a shutdown. Dayton’s latest offer spends about $2 billion more than Republicans plans for the next two years. He cut his proposed spending by about $1.8 billion. Republicans want to spend about $34 billion, a position they have not moved from since March. Startribune.com. June 16, 2011
-About 800 Minnesota state employees will start getting layoff notices this week as Gov. Mark Dayton’s administration prepares for a possible government shutdown on July 1. The Minnesota Management and Budget office said State Patrol troopers, Department of Natural Resources conservation officers and licensed officers of the Bureau of Criminal Apprehension would get notices on June 1. Workers at those agencies are represented by the Minnesota Law Enforcement Association, and have contracts that require layoff notices by certain dates. A new two-year state budget is supposed to be in place by July 1, but an impasse over taxes and spending between Dayton, a Democrat, and Republicans who control the Legislature has cast doubt on whether that will happen. A much larger group of about 35,000 state employees are due to get layoff notices July 10. Statebudgetsolutions.org. June 1, 2011
-Gov. Mark Dayton today vetoed Republican legislators’ $34 billion budget plan. The vetoes of budget and tax bills came hours after Legislature adjourned its regular session. The actions set up continued negotiations and the need for a special legislative session. Under current law, the state would spend $39 billion in the next two years. Dayton originally proposed $37 billion, but lowered that to $35.8 billion last week. Republicans insist on spending only what already is due to come into the state treasury: $34 billion. They say they will not accept higher taxes. A week ago, Dayton announced he would trim in half his proposed $3 billion-plus tax increase and would accept deeper spending cuts than he earlier planned. But that was as far as he will go, he said. Capitolchatter. May 24, 2011.
-State is considering “pay for performance” bonds that would pay investors a 4 percent return on investment. The state would use the money to pay nonprofit providers that provide job training, help addicts kick their habits, or other such services—but only if they produced specific results that would save the state money. Under the Minnesota plan, nonprofits carry the risk. The investors get their return on investment no matter what, but nonprofits get paid only if they succeed. Philanthropy.com. March 24, 2011.
Mississippi- Mississippi lawmakers have given final approval to next year’s state budget. The total spending package comes to about $5.5 billion. House and Senate members had to vote on dozens of separate spending bills that make up the budget. Some small cuts were made for community colleges, mental health, and the homestead tax exemption but there was heated debate over funding for education. Education will not get cut as much as the governor wanted. WJTV. April 4, 2011.
Missouri- Next fiscal year will be only the third time in 30 years the state government has reduced spending year over year now that Missouri Gov. Jay Nixon has signed the $23.29 billion budget for fiscal 2012, starting July 1. Nixon signed the budget, which will reduce total expenditures by at least 2.1 percent, on June 10. The state is expected to spend $23.8 billion this year. Nixon also announced Friday that he plans to withhold $172 million to make sure the budget is balanced. Missouri Watchdog reported, all funds fell year over year by 4.7 percent in 2003 and 2.8 percent in 1984. Spending increased 508 percent from $3.9 billion in 1981 to an estimated $23.8 billion for this fiscal year. Missouriwatchdog.org. June 10, 2011
Montana-Governor signs budget that cuts spending of “general fund” money by more than 6 percent, compared to the current two-year budget period that ends in June. But the budget deal fully restores about $100 million in federal money for programs largely aimed at the needy that Republicans tried to cut - prompting some in the GOP to oppose the compromise. Billingsgazette.com. May 13, 2011
Nebraska – Lawmakers approved a two-year spending plan Wednesday that cuts state agency budgets but leaves nearly $300 million in Nebraska’s cash reserve without raising taxes. The budget bills cleared their third and final reading and advanced to Gov. Dave Heineman. The package would set general fund spending at roughly $7 billion over the two-year budget period that begins July 1. The package closes a budget gap that, earlier in the session, had been projected at nearly $1 billion. Changes to the state’s school aid funding formula accounted for $410 million in savings spread over the next two fiscal years. The proposal would pull $105 million from the state’s cash reserve to balance the budget, but leave $299 million. Businessweek. May 12, 2011
Nevada--Gov. Brian Sandoval and legislative leadership reached a budget deal to extend so-called sunset taxes, called that because they were meant to sunset in 2011, to help fill the state’s $2 billion state budget shortfall for the next two-years. The deal also eliminates part of the modified business tax, which was one of the sunset taxes. In this deal, the taxes and fee changes will stay in place until July 1, 2013. It is expected to bring $620 million to the state.Here’s a look at the changes:
· Sales tax: The sales tax increased 0.35 percent statewide in 2009. In Washoe County, that raised the overall sales tax to 7.725 percent. The increase will continue until 2013.
Business license fees: The $100 business license fee doubled to $200 in the 2009 budget deal. The package also included charging the $200 fee on business entities that incorporate in Nevada but don’t operate here. This will continue until 2013.
· Car registration: The depreciation schedule used to determine how much you pay to register your vehicle changed so that vehicles depreciate more slowly. This revenue will continue going into the general fund, switching to the highway fund in 2013.
· Modified business tax: A modified business tax levied on payrolls changed. In 2009, the rate was dropped for businesses with payrolls less than $250,000. In the deal made Wednesday, the tax was eliminated for those businesses. Officials said that will apply to 70 percent of the state’s businesses.
-The rate on payrolls more than $250,000 raised to 1.17 percent in 2009. That tax deal continues that to 2013.
Other key details of the budget deal:
· Reforms to K-12 education, including the end to “last in, first out” practices that require newly hired teachers to be laid off before veteran teachers. Now other factors, such as performance and effectiveness of teachers, must be included for consideration.
· Changes to collective bargaining for local government employees, allowing agreements to be re-opened during times of fiscal emergency.
· Changes to health benefits for new state employees hired after Jan. 1, 2012
RGJ.com June 1, 2011.
- Nevada Supreme Court has ruled that a $62 million grab by the Legislature last year from the Clean Water Coalition in Clark County was unconstitutional. The unanimous ruling punches another hole in the already slim state budget. To help solve the state’s budget problems, the 2010 special session of the Legislature passed a law to require the coalition to turn over $62 million to the state. Las Vegas Sun. May 26, 2011. This Court ruling also invalidated efforts by Governor Sandoval to grab hundreds of millions of dollars from localities to balance the state budget. Though it centered on Sandoval’s plan to take money from a clean-water fund in Clark County, the decision also undercuts Sandoval’s attempts to raid school district reserves, local property tax accounts and other sources. Sandoval’s senior adviser told the Las Vegas Sun that the ruling was “roughly 10 times worse” than the administration expected and the Las Vegas Review-Journal quoted a Sandoval attorney saying, “I don’t see how there is any way that we could take a narrow view of the court’s decision.” Sandoval himself is a former federal judge. With time running out on the Nevada legislative session, Sandoval will release a revised budget proposal on May 27. In it, he is expected to go along with a Democratic-favored extension of a host of taxes that were approved in 2009 and set to expire by the end of June, the Review-Journal reported. While the governor has been resolute in his pledge not to raise taxes, he said on Thursday that he “will not gamble with the state’s future.” Stateline.org May 27, 2011.
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New Hampshire – Budget becomes law without Governor’s signature. Governor concluded a showdown veto “would not lead to a better budget.”Nashautelegraph.com. June 25, 2011
-House and Senate negotiators have reached a tentative agreement on the budget for the next two years, but continue to work on the details. Negotiators agreed to spend about $4.4 billion from state taxes on services and school aid. They agreed to accept higher spending levels in the Senate’s version of the budget on services for the disabled and mentally ill. They continue to work on policies needed to implement the spending and expect to take a final vote on June 16. Bostoncom. June 15, 2011
–A new way on retiree health care costs. Stateline.org. May 12, 2010
New Jersey- Gov. Christie vetoed $900 million from the $29.7 billion budget including vetoing Democrats efforts to restore funding to public assistance programs. NJ.com. July 1, 2011
- The Democrat-led state legislature passed a budget on June 29, the eve of the state’s budget deadline, but the deal was immediately rejected by Republican Governor Chris Christie. “The Democratic budget passed today by the Senate and the Assembly is unconstitutional in its present form based on hundreds of millions of dollars in spending that is unsupported by constitutionally certified revenue,” Christie said in a statement issued by his office. “At this time, the governor can’t be certain if the remedy is the line item veto or whether he needs to consider sending it back to the legislature,” the statement said. The Democrats’ spending plan, which was passed by both houses on June 29, increased spending on schools and for a handful of smaller programs. The Democrats also approved a tax on the state’s highest earners. Christie vetoed a so-called “Millionaires’ Tax” last year and is expected to do the same again. Reuters.com. June 30, 2011
-Democratic legislative leaders on Thursday unveiled their version of the 2011-12 state budget, a proposal that totals $30 billion, $400 million more than the fiscal package Gov. Chris Christie has proposed. The Democratic version restores more than $1 billion to underfunded school districts and also places millions of dollars back into property tax relief. Senate President Stephen M. Sweeney (D-Gloucester) told reporters that separate legislation that would reinstate a so-called “millionaires tax” will also be moved. The measure would raise the income tax rate on New Jerseyans who earn more than $1 million annually. The tax rate for people with incomes above $1 million would rise from 8.97 percent to 10.75 percent. The rate would be higher than those levied on millionaires in Pennsylvania, New York or Connecticut. Newjerseynewsroom.com. June 24, 2011.
- NJ Supreme Court orders state to increase aid to schools ruling that a major piece of Gov. Chris Christie’s cost-cutting was unconstitutional and ordered lawmakers to raise spending for poor, urban schools by $500 million next year, despite a state budget shortfall estimated at $10 billion. NYTimes. May 24, 2011.
New Mexico-State budget shortfall grows to $452 million. Bloomberg Businessweek.com. November 11, 2010.
New York - On the same day that he announced a proposal to cut retirement benefits for all new state workers, New York Governor Andrew Cuomo moved ahead on plans to lay off as many as 9,800 current employees to help the short-term finances of the state. The Times-Union of Albany obtained a memo indicating that layoffs are scheduled to begin July 15, unless Cuomo and the state’s major public worker unions agree on new contracts before then. The governor has been demanding $450 million in concessions from the unions since their contracts expired April 1, though negotiations remain stalled. Stateline.org. July 15.
–Legislature passes first on-time budget in five years. Stateline.org. March 31, 2011.
North Carolina – Senate voted 31-19 to override Governor Perdue’s veto of the budget on June 15. Earlier the House had voted 73—46 to override the Governor’s veto. Charlotteobserver. June 15, 2011.
-Democratic Gov. Bev Perdue on June 12, vetoed the $19.7 billion budget, despite Republican legislative leaders’ confidence that they have enough override votes. The legislature passed its budget and sent it to Perdue about a week ago. She had until Tuesday to act. “I will not put my name on a plan that so blatantly ignores the values of North Carolina’s people,” she said today in the Capitol’s old Senate chamber. “I cannot support a budget that sends the message that North Carolina is moving backwards, when we have always been a state that led the nation.” No North Carolina governor has ever vetoed a budget. Newsobserver.com. June 12, 2011.-The House passed the $19.7 billion dollar state budget on June 4, and the Senate ratified the bill, sending the first Republican-penned state budget in more than a century to the desk of Democratic Gov. Bev Perdue. www2.wnct.com. June 4, 2011
- Gov. Bev Perdue vetoed a measure which would have filled a major budget shortfall by requiring teachers and state employees to pay a monthly premium for their health insurance plan for the first time. The State Health Plan for Teachers and State Employees faces a $515 million budget shortfall over the next two years and a $30 billion unfunded liability over the next 30 years. Lawmakers voted to balance the budget by making state employees pick up more of the tab and placing the plan under the supervision of the state treasurer, the goal of Senate Bill 265, which was passed by the Senate and House before being vetoed by Perdue. Under SB 265, for the first time ever, state employees would have been asked to pay a monthly premium for their health insurance—about $20 for the best plan and $10 for a basic plan, or about 5 percent of the total cost of coverage. They also would have had slightly higher deductibles and co-pays for office visits and prescription drugs. Heartland.org May 2, 2011.
North Dakota- The budget increased general fund spending by 20 percent over the next two years due to an accounting maneuver. The biennial budget that lawmakers approved includes several big-ticket spending items, such as $370 million in road repairs and another $342 million to reduce local property taxes. But those projects were paid for through a special account financed by excess oil-tax revenues — rather than the general fund — allowing Governor Jack Dalrymple and the Legislature to mask their effect on overall spending until after lawmakers had approved a two-year general fund budget on April 28. “Those programs were financed by a fund for surplus oil taxes that has often been used as a piggy bank for favored projects,” the AP reports. “The Legislature abolished the fund, which is called the Permanent Oil Tax Trust Fund, and ordered that the money be transferred to the general fund.” The result is that the $3.3 billion budget that Dalrymple originally proposed in December became a $4.1 billion budget by the time it was approved by lawmakers. Stateline.org. May 2, 2011. Senate Republicans unveiled a revamped $55.7 billion state budget Tuesday, touting increased funding for local governments, school districts, in-home care for the elderly and efforts to combat prescription drug abuse.
OHIO- The House voted 59-40 along party lines on June 29 to give final approval to a new two-year, $55.8 billion budget that contains considerable changes for local governments, schools, Medicaid and state prisons. The bill was sent to Gov. John Kasich, who plans to sign it June 30, the final day of this fiscal year. It will take effect July 1. Dispatch.com. June 30, 2011
-The key changes made Monday night by GOP lawmakers were largely eliminating a controversial merit pay system for teachers, allowing only a small number of new charter schools to be opened without the current system of direct sponsors, banning new e-schools until 2013, and requiring districts to pay for only two additional years of education for high school dropouts. Also added was a provision that applies only to Cleveland Public Schools, allowing Mayor Frank Jackson to remove collective bargaining rights for employees at public schools being converted into charter schools as long as he files a letter with the Cleveland Board of Education and the state employment relations board saying he is doing so. Cleveland.com. June 28, 2011.
-Buckeye Institute analysis of Governor Kasich budget. Buckeye Institute. March 17, 2011
Oklahoma— Senate passes budget on May 18 but without a keep component of the budget agreement to allow the Department of Transportation to sell $70 million in bonds in exchange for diverting $100 million in road funds to other areas of state government. This proposal failed 23-21, short of the 25 votes needed to pass the legislation. This proposal will be reconsidered later this week. The Legislature is scheduled to adjourn by May 20!. Tulsaworld.com May 18, 2011.
-House approves $6.5 billion budget on May 13. A major part of the budget that begins July 1 is a proposal that authorizes the Legislature to move $100 million from a road and bridge fund at ODOT to help shore up a $500 million hole in the state budget. In exchange, ODOT is allowed to issue a $70 million bond issue for transportation projects. The bill narrowly passed the GOP-controlled House on a 51-45 vote, barely receiving the 51 votes needed for passage in the 101-member House. Democrats are upset about deep cuts to agency budgets, particularly cuts to education that total close to 5 percent. AP May 13, 2011.
Oregon- Lawmakers opened the 76th Legislature facing a $3.5 billion gap between projected revenue and the estimated cost of continuing business as usual for two more years. They bridged the gap and crafted a $14.7 billion two-year budget that left schools, social safety net programs and just about every other government service far short of their desired levels. They did not raise taxes. Budget writers said they did the best they could with a bleak outlook, giving schools a stable funding floor that won’t be reduced and protecting some services for seniors and the disabled that once looked doomed. They left unspent more than $400 million of projected revenue, but also created a spending plan that relies on ambitious savings goals in health care. Washingtonexaminer.com. July 1, 2011.
-Governor cuts health care for state employees effective April 1, 2011. Suite101.com. February 26, 2011
-State budget shortfall for FY11-13 is now $3.5 billion. NRToday. November 23, 2010.
Pennsylvania – The Legislature gave final approval on June 29 to a $27.15 billion budget that will cut spending by three percent from the current fiscal year. The budget is due to be signed by Governor Tom Corbett on June 30 and the state’s fiscal year begins July 1. Corbett is among a new class of Republican governors that have made a splash in states like Wisconsin, Ohio and Florida by calling for major cuts in government spending and tax breaks. Reuters.com. June 30, 2011.
This is the first budget completed on time in nine years, and the first budget decrease since the economy sank following the 9/11 terrorist attacks, according to legislative staff Philly.com. June 28, 2011.
Rhode Island – The Senate approved a $7.7-billion state budget on June 29 and sent the budget to the Governor. Highlights of the proposal include: —A new 7 percent sales tax on the purchase of non-prescription drugs, software and videogame downloads, smartphone applications and sightseeing tours. The new taxes would go into effect Oct. 1 and would raise an estimated $17 million in the next fiscal year. —Increased monthly premiums for families on Medicaid whose income places them above the poverty line. A family of four living on an income of $33,000 would see their monthly Medicaid premium rise from $61 to $91. Boston.com. June 29, 2011.
South Carolina – Legislature approved a $6 billion state budget on June 22, that cuts spending on programs for the poor, gives businesses an unemployment tax break and will send schools slightly more money per student than they received this year. The GOP-dominated House approved the proposed compromise by a narrow 57-54 vote with both Democrats and Tea Party-leaning Republicans opposing it. The Senate, also majority Republican, followed hours later with a 24-17 vote. TheState.com. June 22, 2011
South Dakota-Legislature passes balanced budget to eliminate state budget shortfall for FY 2012 on March 11, 2011. capjournal.com. March 14, 2011.
Tennessee– Thousands of Tennesseans will get an extension of their unemployment benefits under the $30.78 billion budget approved by the General Assembly on May 21. The Senate voted 32-0 and the House passed it 96-0. The budget for the fiscal year that begins July 1 also includes $71 million for disaster relief from recent storms and flooding and a hospital assessment fee supported by the industry that would raise $449 million. It is designed to draw another $871 million in federal matching funds. A balanced state spending plan is the only legislation that the General Assembly is required to pass each year under the state constitution. The spending plan includes a 1.6 percent raise for state employees, their first pay hike in four years. Tennessean.com. May 21, 2011.
Texas – State agencies have begun laying off employees, with almost 6,000 jobs expected to be lost in the current two-year budget cycle. UPI.com. July 13, 2011.
-Must-passed budget bill revived and approved by House and sent to Governor. The bill contains the public school finance overhaul, which uses a new, complicated formula to equitably distribute the $4 billion reduction in expected funding. It also contains provisions that balance the state budget, which is mandated by the Texas Constitution. Chron.com. June 28, 2011
-The 2012-13 budget has been approved by both the House and the Senate, and now, with less than two days left in the legislative session, lawmakers have to pay for it by passing one more piece of legislation that raises $3.5 billion in “non-tax revenue” and revises school finance law to allow the state to reduce aid to public schools by $4 billion. Without that legislation — SB 1811 — the budget doesn’t balance and lawmakers will be forced to come back in a special session to deal with the issue. They’re likely coming back anyway, since the House and the Senate and Gov. Rick Perry couldn’t reconcile their differences over reforms to the Texas Windstorm Insurance Association. The governor doesn’t have to call them back for that, but he has said he will. The legislation includes a hybrid school finance plan that spells out how local school districts will fare when the state cuts $4 billion from what it had planned to send them over the next two school years. Lawmakers got those printouts yesterday and have been poring over them to see how their own local districts come out; those results will help them decide whether to support or oppose the plan. And it contains $3.5 billion in “non-tax revenue” — deferred payments, accelerated tax collections and accounting tricks — that allows lawmakers to cover spending without tapping the Rainy Day Fund or raising taxes. A proposed speedup of state franchise tax collections — that’s the main tax paid by Texas businesses — was taken out of the bill after lawmakers raised objections. TexasTribune.org. May 29, 2011
-– Legislative negotiators agreed on a two-year state budget totaling nearly $172.4 billion, an 8.1 percent decrease from current spending in state and federal funds combined. The 9-1 vote will send the measure to the full House and Senate for consideration. The only “no” vote was Rep. Sylvester Turner, D-Houston, who voiced concern over cutbacks to public education and a decision to delay funding $4.8 billion in anticipated Medicaid caseload costs. Pushing back the Medicaid costs means lawmakers will have to deal with that expense when they return in regular session in 2013. Negotiators still are trying to reach agreement on revising school funding formulas to provide for the lower funding level. They also are working on revenue provisions to help provide funding to balance the budget through means such as pushing back state school district payments. Agreement on the remaining legislation is key to the budget deal working. the proposal would cut health and human services funding by nearly $11.3 billion, or 17.2 percent. Chron.com. May 26, 2011.
-Lt. Gov. David Dewhurst and House Speaker Joe Straus announced the long-sought budget agreement deal late in the afternoon on May 20, after several days of tense backroom negotiations. Then both chambers revved up to take action on some weighty bills that are essential to balancing the 2012-13 budget, which would spend $80.6 billion in general state revenue over the next two years. The budget still will require approval by the House and Senate and, eventually, the governor. The agreement is hinged on the House passing a so-called fiscal matters bill, Senate Bill 1811, that would free up money to help pay for the $3 billion in additional spending to which the House negotiators agreed. “Once they get (SB) 1811 passed, I think we’ll resume deliberations on the budget, and hopefully we can get it closed out tomorrow,” Senate Finance Chairman Steve Ogden, R-Bryan, said Friday. The Senate agreed to back off $1 billion in spending to reach consensus on the budget - of paramount importance to the state’s Republican leaders, who want to avoid a special legislative session this summer. The House began debating SB 1811 Friday evening and continued late into the night. The bill is key to the budget deal because it would allow legislators to defer about $2 billion in education costs into the first few days of the following budget cycle - a move that legislators use to delay costs without an actual loss of money for schools. A more optimistic view of the Texas economy over the next two years appears to have been key to the budget agreement reached between the House and Senate. House and Senate leaders found $800 million for the budget by assuming that property values will be higher over the next two years than previously estimated, according to a legislative source close to the negotiations who could not speak publicly because of the delicate nature of the situation. That growth would reduce the state’s obligation to school districts. The Senate did its part to deal with the budget package by advancing its school finance plan. The budget agreement shorts school districts by $4 billion over the next two years compared with current law. But neither chamber had passed separate legislation that would change that law and reduce the state’s obligation. Sen. Florence Shapiro, R-Plano, had previously been unable to muster the 21 votes to bring the school finance bill up for debate in the Senate because Democrats refused to support a $4 billion reduction in funding for school districts. But an opportunity presented itself when Senate Bill 1581, a budget-related education bill, got kicked back to the upper chamber because of a procedural issue. Senators voted 17-13 to attach their school finance proposal, which changes how state aid is distributed to districts. The House might take it up as early as Monday. Shapiro said this approach is “the best chance, the very best chance that we have as a body to protect the classroom.” She added that the Senate plan might not be perfect, but it is an effort to soften the impact of reduced funding for public education. Statesman.com. May 20, 2011.
Utah- The approved budget adds back all but 1 percent of the 7 percent in cuts made earlier in the session. SB2, sponsored by Senate Budget Chairman Lyle Hillyard, R-Logan, was approved by both the Senate and the House and now goes to Gov. Gary Herbert for his action on the estimated $12 billion spending plan. Some areas of state government including higher education will see spending sliced by 2 percent or more, but public education emerged not only intact but with additional funds for enrollment growth. Deseretnews.com. March 8, 2011.
Vermont-The approved budget eliminated a $176 million state budget shortfall through a combination of cuts, revenue adjustments and an improving state economy that boosted the state’s tax yield by an unanticipated $29.1 million. Savings were derived in part through $12 million in concessions by the state employees’ union; a $38.6 million cut in human services programs; $4.1 million in avoided unemployment insurance interest payments waived (for at least the time being) by the federal government; and $1.7 million in miscellaneous cuts. The budget is also balanced by not transferring $23 million from the state’s General Fund to the Education Fund, meaning that local property taxpayers will likely have to pick up the slack in fiscal year 2013 or search for cuts that amount to about 2 percent statewide as part of the Challenges for Change mandate. A recalculation and extension of the state’s tax on health care providers (like Porter Hospital), which amounts to about $5.9 million spread among all hospitals in the state, a boost in the cigarette tax (of 38 cents per pack) that will generate $3 million more than current taxes, were in addition to another $24.2 million in new revenue. Addisonindependent.com. May 12, 2011.
Virginia- House and Senate unanimously passed amendments to the state’s $80 billion budget Sunday, ending the 2011 General Assembly one day late. The compromise government spending blueprint through June 2012 offers more aid for public schools, for the profoundly disabled and
for state and local government pensioners. It also provides state aid to brake the meteoric rise in tuition at state-supported colleges and universities. Wtvr.com. February 27, 2011.
Washington – Pay for teachers will be cut 1.9 percent and 3 percent for school administrative staff over the next two years under a budget passed by the Legislature on May 25. The pay cuts, worth $179 million, are part of more than $4 billion in cuts lawmakers to close a roughly $5 billion budget shortfall. The size of pay reductions for educators was a key area of disagreement during budget negotiations over the past several months. Other cuts to K-12 education include suspending two initiatives dealing with teacher pay and class sizes worth around $1 billion. Another $215 million is saved by eliminating other money to reduce K-4 class sizes. Cuts to the state’s public colleges and universities total $535 million, but the loss is partially offset by tuition increases. It’s not certain, though, how much the schools would raise tuition because the Legislature is letting the institutions set their own rates over the next four years. Lawmakers have been assuming double-digit tuition increases. The budget also saves $344 million by eliminating automatic cost of living increases for retired workers in the state’s older, closed Plan 1 pensions. A 3 percent pay cut for state workers through unpaid time off saves about $176 million. The budget also uses $459 million in one-time transfers of money from accounts outside the general fund. The budget leaves about $723 million in reserves in case the economy stumbles and tax collections drop below projections. Seattle Times. May 25, 2011.
Gov. Gregoire gets a “F” on state’s budget. Freedom Foundation. March 1, 2011.
West Virginia – West Virginia lawmakers passed an $11.4 billion state budget on March 18 that includes public employee pay raises, retiree bonuses and additional money for mine inspectors. The budget bill is about $134 million larger than what Governor Tomblin proposed when the regular session began in January. Charleston Gazette.com March 18, 2011
Wisconsin - The Senate passed the budget on a party line 19-14 vote on June 16. The Assembly passed an identical version earlier in the day on a 60-38 vote, with all Republicans voting for it along with one independent. No Democrats in either house voted for it. Walker and Republicans support expanding vouchers beyond the city of Milwaukee. The budget would allow vouchers in Milwaukee County and the city of Racine, but language was removed that would have permitted them in Green Bay. Greenbaypressgazette.com. June 17, 2011
