The Senate Ways & Means (SWM) budget proposal addresses a budget gap of close to $3 billion by recommending significant budget cuts and relying heavily on assistance from the federal government. It does not include the Governor’s tax reform proposals, or other new taxes. Also unlike the Governor’s proposal, it does not draw on the state “Rainy Day” fund. It does, however, rely on some other temporary state revenue sources and some one-time savings.
The most significant theme from the House budget debate is how little happened. Facing a budget gap of approximately $3 billion, it would have been irresponsible for the House to adopt significant spending amendments without offsetting revenue — and it did not. The House could have reduced the severity of budget cuts by adopting revenue measures, but it chose not to do so.
The House Ways & Means (HWM) budget proposal relies primarily on budget cuts and federal assistance to address a budget gap of approximately $3 billion. The HWM proposal recommends over $1 billion in budget cuts and more than $1.5 billion in temporary revenue from the federal government, primarily stimulus funds from the American Recovery and Reinvestment Act (ARRA).
This Budget Brief examines potential strategies for implementing Chapter 70 reductions while protecting the ability of every school district to spend at no less than the foundation budget amount, properly adjusted for inflation.
This Budget Brief provides an overview of the recent reforms that make it easier to understand the state budget (or, that make it more transparent), highlights some new improvements in that regard this year, and offers an example of how the budget could present important information even more clearly.
Following two years in which the state budget was cut deeply and taxes were increased to address substantial budget deficits, the Governor’s FY 2011 budget recommends additional cuts, suggests modest revenue increases, and relies heavily on assistance from the federal government.
The balance in the state’s Stabilization Fund has varied over the past 10 years. The Stabilization Fund–often referred to as the “Rainy Day Fund”–is a cushion for when the economy turns down. It is like a savings account for the state to turn to when there is not enough money in the General Fund (the “checking account”) to fund the state’s operations.