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STATE BUDGETS

State Budget Update March 14, 2012

March 14, 2012

Updates this week:

  • States have not financed 96% of the projected $627.4 billion to fund future retiree health care costs for millions of government workers. Bloomberg.com
  • ILLINOIS: Illinois Policy Institute presents alternative state budget that would cut wages for state employees by 10 percent, require retired workers to pay for their own health care premiums, and force local school districts, instead of the state, to fund teacher pensions. CBSlocal.com
  • LOUISIANA: Senators question the Governor's budget, specifically the $120 million to come from increasing some state employees' contributions to pensions. The pension overhaul would require an 11 percent (up from 8 percent) contribution to the retirement system. The LFO stated the budget also assumes another $28.9 million in "savings" from additional contributions made by correctional officers and DWF officers, though both groups are excluded from the pension overhaul. NOLA.com
  • MINNESOTA: House Republicans proposed dipping into the state's budget reserve to start paying back $2.4 billion owed to public schools. The legislation that shifts $430 million from rainy-day funds to repay K-12 schools also includes ending the practice of firing teachers based on seniority rather than performance. Twincities.com
  • WEST VIRGINIA: WV became the first state to pledge tax revenue to finance retiree health care burden, a major development in states' efforts to pay down the soaring health benefit liabilities. Statelive.org

State Budget Deficit Updates

  • Increasing costs and poor funding by states of retiree health care costs for governments workers threatens to produce budget crises. States have not financed almost 96% of the $627.4 billion projected to owe for future retiree benefits. Governors are coping with lower general-fund revenue and rising demand for services following the longest recession since the Great Depression. Bloomberg.com. March 6, 2012.
  • Foreclosure deal may help states to prop up budgets. BloombergBusinessweek.com. February 14, 2012.
  • Budget gimmicks use by states. Statebudgetsolutions.com. January 19, 2012.

  • State governments trying new ways to cope with Medicaid costs. Kaiserhealthnews.org. January 9, 2012.

  • Standard & Poor's, "For US State Budgets, Austerity Is Here To Stay." S&P, January 5, 2012. 

  • Updates on State Transparency Websites:NCSL. September 12, 2011.
  • Best and Worse Run States in America- An Analysis of all 50. 24/7wallst.com. November 28, 2011.
  • Seven things Lawmakers need to consider when reforming corrections policy. NCSL. December 19, 2011.
  • Healthcare spending by state. Cms.gov.
  • State Budget Solutions Report reveals aggregate state debt exceeds $4 trillion. Statebudgetsolutions.org. October 24 2011.

States' Running Deficits & Surpluses: 

California:$21 billion budget deficit. Sunshinestatenews.com, January 13, 2012.

Colorado$500 million shortfall. Chronicle, September 20, 2011.

Connecticut: State budget deficit is growing, now $97.5 million. Theday.com. March 2, 2012.

Illinois$8 billionChicago Tribune, September 26, 2011.

Louisiana$251 million deficit in current budget. Bayoubuxx.com. December 17, 2011.

Maryland$1 billion shortfall for fiscal year 2012-13. Baltimoresun.com. January 3, 2012

Massachusetts: $1 billion deficit for the next fiscal year.Masslive.com. December 12, 2011.

Michigan$1.2 billion surplus in FY 2011. Detroitnews.com. January 12, 2012.

Minnesota: Budget forecast shows $323 million surplusMinnesotaPublicRadio.com. February 29, 2012.

Mississippi$1 billion shortfall for fiscal year 2012-13.  Clarionledger.com. January 3, 2012.

Missouri: $750 million deficit projected for fiscal year 2012. Missourinet.com. December 16, 2011.

Montana: State budget surplus expected to reach $426 millionMissoulian.com. February 18, 2012.

New York$350 million deficit this year (fiscal 2012) and  $3.5 billion deficit in fiscal 2013.BusinessWeek. November 18, 2011. 

Pennsylvania$500 million shortfall projected for the current year. Post-gazette.com. December 20, 2011.

Rhode Island$120 million budget shortfallBoston.com. January 4, 2012.

Vermont$46 million budget shortfallVTdigger.org. January 4, 2012.

Virginia: Senate budget committee estimates up to a billion dollars shortfall for FY 2012-14 while the House Appropriations Committee estimates a $1.5 billion shortfall. Washington Post. December 15, 2011.

Washington$500 millionSeattletimes.com. February 17, 2012. 

Wyoming$437 million surplus forecasted as of June 30, 2012. Powell Tribune, September 27, 2011.

Information by State:

Alabama

  • Legislators will likely need to find a way to cut $400 million from the state's general fund, as federal stimulus money and other one-time revenue sources are running out. Dothaneagle.com. February 5, 2012.
  • A $1.8 billon General Fund budget approved by the Alabama Senate 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. Forbes.com. April 8, 2011. 

Alaska

Legislature passes $9 billion total budget including about $7 billion in state funds. The compromise put more money to pay for college scholarships for high-achieving high school graduates. The final bill contained $6 million for Parnell's plan and $3 million for needs-based assistance. Alaska Dispatch. May 4, 2011.

Arizona

  • House Republican leaders released budget; Governor says it is dead on arrival. Insidetucsonbusiness.com. February 23, 2012.
  • Governor Brewer proposes that the state buy back state buildings sold when money was tight. Foxnews.com. January 14, 2012.
  • 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 changes would save the state a projected $500 million to help close a $1.1 billion budget shortfall. Arizona Republic. April 8, 2011.

Arkansas

  • Medicaid shortfall could hit $400 million in 2013. CBSnews.com. February 23, 2012.
  • 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. Arkansas online. April 2, 2011. 

California

  • Worse than the pension crisis: California's $62 billion retiree health care problem. NBCbayarea.com. March 8, 2012.
  • State revenues still below projections. The state ended the last fiscal year with a cash deficit of $8.2 billion. The combined current year cash deficit stands at $21.6 billion. Those deficits are being covered with $15.2 billion funded by internal borrowing schemes (temporary loans from special funds) and $6.4 billion of external borrowing. OC-breeze.com. March 12, 2012.
  • Appearing on Bloomberg last week, Treasurer Lockyer stated that the sale of $1 billion in state revenue anticipation notes to Barcklay's and JP Morgan was to avoid continuing the seven-week cash-flow problems. Controller Chiang has been warning of the problem, largely due to decreased revenue, and plans to issue about $2 billion in general obligation debt. Capoliticalnews.com. February 29, 2012.
  • S&P raises state's credit rating from "stable" to "positive." WSJ.com. February 14, 2012.

Colorado

  • Denver court decision in education says Colorado is underfunding schools by billions. Denverpost.com.December 9, 2011.
  • Colorado lawmakers will likely have to cut another $400 million to $500 million next year as the state continues trying to dig out of the economic downturn, the governor's economic team said on September 20. Chron.com. September 20, 2011.
  • Governor Hickenlooper signed the budget compromise bill on May 6 to help cover a $1 billion state budget shortfall. Colorado.gov. May 6, 2011.

Connecticut

  • State budget deficit is growing, now $97.5 million. Theday.com. March 2, 2012.
  • Governor Malloy budget is drawing fire for using gimmicks. A $700 million bond sale was used to fix roads and build schools, but also provided a $65 million payment to balance the budget, with high interest. WSJ.com. February 21, 2012.
  • In two months, CT went from a $101 million surplus to a $144.5 million deficit due to excessive spending and less than project revenue. Courant.com. January 25, 2012.
  • Governor Malloy plans to use budget-cutting authority to trim programs across state government and impose new restrictions on hiring to help cover a projected $73.6M deficit in 2012 budget. Courant.com. January 24, 2012.
  • Moody's downgrades state bonds citing the state's high debt, racked up by substantial borrowing and depletion of the rainy day fund, used to cover deficits resulting from the recession that limited the state's tax collections. Courant.com. January 20, 2012.
  • Twenty-two State Troopers are expected to lose their jobs. Governor Malloy announced $135 million budget cuts to help balance the two-year budget. Blogs.courant.com. September 6, 2011.
  • Unions overwhelmingly ratify concession packageto balance state budget. Registercitizen.com. August 18, 2011.

Delaware

  • Gov. Jack Markells' $3.45 billion operating budget proposal includes additional spending for Medicaid and schools, but no tax or fee increases. The budget represents a 1% increase over this year's operating budget. CBSnews.com, January 27, 2012.

Florida

Georgia

Hawaii

  • State plans to tighten spending rather than increase taxes to cover a predicted $19.3 million state budget deficit in 2013. Therepublic.com. January 9, 2012.
  • Moody's downgrades Hawaii's General Obligation Bond Rating. Hawaii Reporter. May 17, 2011.

Idaho

  • Governor calls for $45 million in tax cuts. Spokesman.com. January 10, 2012.
  • Governor raises the budget by over 5 percent. Idahomountainexpress.com. January 10, 2012.
  • The Joint Finance- Appropriation Committee adopted the ending balance projected to be $39.4 million ($10.6 million lower than the Governor's recommended ending balance). The 2011 session included new legislation that provides for transfers from dedicated accounts to the General Fund to help balance FY 2012. The Legislature provided for an overall 2.2 % omnibus General Fund reduction for all agencies and departments. The 2011 Idaho Legislature.

Illinois

  • Illinois Policy Institute presents alternative budget that would cut wages for state employees by 10 percent, require retired workers to pay for their own health care premiums, and force local school districts, instead of the state, to fund teacher pensions. CBSlocal.com. March 8, 2012.
  • House undercuts Governor's budget by approving revenue forecast $200 million below the Governor's. Chicagotribune.com. March 1, 2012.
  • Governor Quinn to cut budget back to 2008 levels, requiring each state departments to make 9 percent cuts. However, the education budget it larger than last year. SJ-R.com. February 20, 2012.
  • Governor wants $2 billion in Medicaid cuts. ChicagoSunTimes.com. February 7, 2012. Governor also calls for more spending; legislators wonder where he plans to get the money. Chicagotribune.com. February 2, 2012.
  • IL facing financial disaster under pile of unpaid bills that could reach $35 billion in five years if state fails to reign in pension and other costs, according to the Civic Foundation. Chicagotribune.com. January 30, 2012.
  • In FY 2012, Medicaid and pension spending is equivalent to 60 percent of the state's base operating budget; by 2017, it increases to 73 percent. Chicagomag.com. January 30, 2012.

Indiana

  • State officials find $300 million in revenue.TheRepublic.com. April 30, 2011.

Iowa

  • State auditor says Governor's budget doesn't cover pay increases for state employees or close the $5.7 billion pension shortfall. CBSnews.com. February 6, 2012.
  • Governor proposes budget that increases spending 3.8 percent. Iowapolitics.com. January 10, 2012.
  • 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

  • Governor proposes tightening state budget by 4.1% lower than last year. Nebraska.tv. January 12, 2012.
  • Sharp cuts taking place in Kansas. TheWashingtonPost.com. December 21, 2011.

Kentucky

Louisiana

  • Senators question the Governor's budget, specifically the $120 million to come from increasing some state employees' contributions to pensions. The pension overhaul would require an 11 percent (up from 8 percent) contribution to the retirement system. The LFO stated the budget also assumes another $28.9 million in "savings" from additional contributions made by correctional officers and DWF officers, though both groups are excluded from the pension overhaul. NOLA.com. March 13, 2012.
  • Privatizing state prisons will help Louisiana's $900 million deficit. NBC33tv.com. March 13, 2012.
  • Governor Jindal plans to close a $900 million shortfall by cutting nearly 6,400 state jobs, overhauling the state pension system, and privatizing some prisons and health centers. Nola.com. February 9, 2012.
  • The $895M shortfall projected in 2012 isn't a surprise: At least 40% of the gap is tied to the use of one-time money used for state Medicaid that propped up parts of the current budget and will expire before the start of the fiscal year in July. CBSnews.com. January 24, 2012.

Maine

  • Budget bill gets final Senate approval. Budget cuts Medicaid coverage for thousands. CBSnews.com. February 24, 2012.

Maryland

  • Senate panel votes to raise income tax and phase in pension split with counties over four years. Washingtonpost.com. March 8, 2012.
  • State analysts outlined nearly $800 million in potential budget cuts on March 6 in a doomsday alternative plan to that proposed by Governor O'Malley, in case lawmakers fail to agree on a budget. Washingtonpost.com. March 6, 2012.
  • Governor proposes tax, fees, and rates increases totaling nearly $1 billion to balance the sate budget, all while increasing spending on transportation and environmental projects. Washingtonpost.com. February 4, 2012.
  • $1 billion shortfall for fiscal year 2012-13. Baltimoresun.com. January 3, 2012.

Massachusetts

  • Gov. Patrick unveils $32.3 billion state budget that increases state spending by approx. 3 %. CBSlocal.com. January 25, 2012.
  • Governor Patrick's top budget official said the Governor will offer "modest and limited new revenue proposals" for next year's budget. Boston.com. January 13, 2012.
  • Chairman of Senate Ways & Means Committee predicts $1 billion deficit in FY 2013. Masslive.com. December, 2011.

Michigan

  • Governor Rick Snyder released his $48.2 billion budget designed to continue the fiscal overhaul he began last year. Detroitnews.com. February 9, 2012.
  • $1.2 billion surplus in FY 2011. Detroitnews.com. January 12, 2012. 
  • Funding model rewards higher education institutions.
  • Detroit prison to close and 2,000 face layoffs to fill state budget shortfall. DetroitFreePress.com. September 29, 2011.

Minnesota

  • House Republicans proposed dipping into the state's budget reserve to start paying back $2.4 billion owed to public schools. The legislation that shifts $430 million from rainy-day funds to repay K-12 schools also includes ending the practice of firing teachers based on seniority rather than performance. Twincities.com. March 8, 2012.
  • Budget forecast shows $323 million surplus. MinnesotaPublicRadio.com. February 29, 2012.
  • State asks consultants to ferret out savings. Startribune.com.December 12, 2011.
  • $876 budget surplus projected for the current biennium that ends June 30, 2013, but $1.3 billion deficit projected for next biennium.Lakeville.patch.com. December 2, 2011.
  • Finalizes sale of $757 million in tobacco bonds - a move that comes with substantial costs. Duluthnewstribune.com. November 17, 2011.
  • Lawmakers okay changes that could drop 65,000 from Medicaid. JSonline.com. November 10, 2011.
  • Moody's lowers Minnesota outlookto negative on strained finances. Online.wsj.com. August 1, 2011.

Mississippi

  • House votes to alter budget process. Lawmakers adding money to a program must cut the same amount from another program. Clarionledger.com. February 13, 2012.
  • Governor Bryant's first budget proposal recommends $26 million less in state spending by cutting departments and agencies by 5.5%, but fully funding education. Commercialappeal.com. February 1, 2012.
  • New Governor Bryant plans to restructure state budget process to performance-based budgeting. Commercialappeal.com. January 11, 2012.
  • State facing $1 billion state budget shortfall in next budget clarionledger.com. January 3, 2012.

Missouri

Montana

  • State budget surplus expected to reach $426 million. Missoulian.com. February 18, 2012.

Nebraska

  • Lawmakers headed into the homestretch as possible showdown with Governor Heineman nears to debate tweaking the state budget. Journalstar.com. March 13, 2012.
  • The Appropriations Committee advanced three budget bills totaling $7.2 billion to the Legislature on March 6th, leaving only $17.6 million for bills still waiting for debate. Forty-nine Senators will begin deliberating the package next week. Journalstar.com. March 6, 2012. 

Nevada

Gov. Brian Sandoval and legislative leadership reached a budget deal to extend the 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. August 1, 2011.

New Hampshire

New Jersey

  • S&P reviews Christie's budget and issues warning that NJ may have difficulty weathering economic setbacks. S&P cited the use of one-shot revenues, the small $300 million surplus, the pension fund hole, and roughly $530 million in losses due to tax cuts. Revenue-growth estimates of more than 7 percent defy conventional wisdom. NJ.com. February 25, 2012.
  • Gov. Christie proposes $32.1 billion budget, increasing spending by 8.2 percent by relying on optimistic revenue projections and reserving less than 1 percent. Christie dedicated $1.07 billion to the pension fund, 70 percent less than the annual contribution requirement. App.com. February 21, 2012.
  • Citing the state's failure to make full pension payments and its sluggish economic recovery, Fitch Ratings downgraded New Jersey's bond rating a notch, ranking it among the lowest in the nation. The move could make it more costly for the state to borrow. Nj.com. August 18, 2011.
  • 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.

New Mexico

New York

  • The state budget is reduced from $134.8 billion (2010-11) to $132.7 billion (2011-12) to $132.5 billion (2012-13). Pressrepublican.com. January 22, 2012.
  • Tax plan passed, legislature faces smaller budget gap. NYTimes.com. December 9, 2011.
  • Gov. Cuomo and legislative leaders announced they had reached an agreement to overhaul New York State's income tax, creating a higher tax bracket for the highest-income residents and reducing the tax rate for millions of middle-class residents. NYTimes.com. December 6, 2011.
  • Gov. Cuomo estimates federal"sequestered cuts"could cost the state $5 billion loss in federal funds over the next 10 years. Timesunion.com. November 21, 2011.
  • Governor Cuomo's office now projects up to a $3.5 billion state budget shortfall for the next fiscal year. Bloomberg.com. November 14, 2011.
  • Medicaid overhaul saves $600 million in six months. TimesUnion.com. October 6, 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.com. June 15, 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. Stateline.org. May 2, 2011.

Ohio

  • Ohio privatized a portion of the state's prison system for $72.7 million. Rueters.com. September 1, 2011.

Oklahoma

  • Governor to push for reducing state personal income tax. NewsOK.com. December 27, 2011.

Oregon

  • Legislators reach compromise on budget to eliminate shortfall and Governor agrees. Oregonlive.com. February 23, 2012.
  • Key legislators reach budget deal, avoid cuts to K-12 education and programs for seniors and the disabled, and create a cushion to cover future revenue declines. Mailtribune.com. February 1, 2012.
  • Oregon legislations to take on $300 million budget shortfall. NWCN.com. January 25, 2012.
  • Governor plans to order a hiring freeze for all state agencies, suspend new enrollments in the Oregon Health Plan and halt all "non-critical" government spending because of the state's budget woes. The governor signaled Tuesday that he will act quickly to impose a statewide hiring freeze of state workers and move forward with several other belt-tightening measures recommended by legislative budget leaders. The intent is to save money and prune spending before lawmakers come back to Salem in February for a short legislative session that promises to be dominated by budgetary concerns.

Pennsylvania

  • Tom Corbett proposed $27.14 billion budget that funds K-12 education but steeply cuts higher education spending, while maintaining "no new taxes" pledge. The proposal is 0.1% less than 2011 budget. Bizjournals.com. February 7, 2012.
  • Fiscal office expects $500 million shortfall by June. Bizjournals. February 6, 2012.
  • Governor reduces $160 million in state spending. Thetimestribune.com. January 5, 2012.

Rhode Island

  • New taxes proposed as an alternative to cuts. Boston.com. January 4, 2012.
  • Governor considers tax proposal as 2012 session nears. boston.com. December 30, 2011.

South Carolina

  • Corporations and residents will get a break on income taxes while public workers go for a fourth year in a row without pay raise under Haley's budget proposal. Businessweek.com. January 13, 2012.

South Dakota

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. June 8, 2011. 

Texas

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

Virginia

  • General Assembly adjourns without budget, but will return March 21st to finish negotiations. Timesdispatch.com. March 11, 2012.
  • Still no budget, but lawmakers are talking. Richmondtimesdispatch.com. March 7, 2012.
  • Virginia's Senate gets another chance to pass revived budget; Lawmakers still upset over bitterly contested elections in January. March 2, 2012.
  • Virginia's fiscal future is in limbo as Senate Democrats kill state budget. CBSlocal.com. February 29, 2012.
  • House & Senate budget committees approve proposals granting pay raises for state employees, more money for K-12 education, restore funding for health care, and help cover increasing pension costs. Fredericksburg.com. February 19, 2012.

Washington

  • SBS statement on Washington budget. Statebudgetsolutions.org. March 9, 2012.
  • No agreement on budget: special session is called. Seattletimes.com. March 8, 2012.
  • Special session will be held if no budget deal is reached by March 8, 2012. Seattletimes.com. March 5, 2012.
  • Senate Republicans take over budget procedure and push budget through Senate. Budget includes no tax increase, cuts more from state programs, but avoids delaying payments to schools. Spokesmanreview.com. March 3, 2012.
  • House Democrats pass budget that relies on $400 million in delayed payments to K-12 and reduced support for local government. Komonews.org. February 29, 2012.
  • Washington state Democrat legislators propose to band together against future revenues to help close a $1.5 billion deficit. WAstatewire.com. February 10, 2012
  • Moody's lowers WA outlook to "negative" based on revenue shortfall. WSJ.com. January 30, 2012.
  • Fitch warns WA state over budget gap. Chicagotribune.com. January 27, 2012.  
  • Senate Democrats unveil government reform ideas. AP.com. January 12, 2012.
  • Washington State Supreme Court rules that state has not adequately funded K-12 education. Additional costs of "adequate funding" could be between $6.9-8.9 billion per biennium. Myfreedomfoundation.com. January 6, 2012.
  • Governor wants to dump tax-vote requirement. Seattletimes.org. January 5, 2012.
  • Legislators propose income tax as part of overhaul. Newstribune.com. January 6, 2012.

West Virginia

WV became the first state to pledge tax revenue to finance retiree health care burden, a major development in states' efforts to pay down the soaring health benefit liabilities. Stateline.org. March 13, 2012.

Wisconsin

Wyoming