THE U.S. FINANCIAL CRISIS AND ITS EFFECTS ON CHILDREN, YOUTH, FAMILIES, SCHOOLS AND SERVICES
STATES: NEW MEXICO TO SOUTH CAROLINA Includes Puerto Rico
Updated on June 14, 2009
These are chronologies of developments in the fiscal situations of States. States that are not currently shown will be added. Links to full texts are listed after the annotations.
New Mexico: Agencies Cut FY 2009 Costs and 2010 Declines Are Projected Compiled from several sources named in the text and in the links below.
*** Office of the Governor, October 17, 2008: “Governor Bill Richardson today responded to the global financial crisis and its effect on State revenue by outlining a fiscally responsible plan to immediately freeze certain spending and reduce operating expenses by 5-percent, saving $114 million. Overall, the Governor’s plan, if adopted by other State officials and the Legislature, could save as much as $440 million. . . . The Governor directed his Cabinet Secretaries to move forward on his plan to curb spending after receiving confirmation today that revenue for the ongoing 2009 budget year will be about $344 million lower than previous estimates, and $200 million less than FY 09 budgeted expenditures. . . . The Governor today directed all executive agencies under his control to take immediate action to cut costs and to develop longer-term plans to reduce spending. . . . The Governor also called upon legislative and judicial leaders to follow his example and help reduce this year’s operating costs by another $16 million. . . . The Governor is making every effort to ensure that funding for education stays in the classroom; however public schools and higher education institutions are advised to develop a strategy for reducing next year’s budget.” *** National Association of Student Financial Aid Administrators, December 8, 2008: “New Mexico's budget shortfall has worsened this year and the State's financial problems will continue through the upcoming fiscal year, potentially forcing cutbacks in large programs like public education. . . . The administration's top budget official acknowledged for the first time that budget reductions are likely next year for nearly all of State government, including public schools and higher education. Almost no revenue growth is expected next year." (This follows the New Mexico’s new revenue outlook released on December 8.) *** Office of the Governor, January 12, 2009: “Governor Richardson is proposing budget cuts and improved tax collections totaling $498 million for the current 2009 budget year which ends in June 2009. That plan includes: (a) target cuts to agencies ($108 million); (b) increased tax collections ($79 million); (c) deauthorization of capital outlay projects ($263 million); and (d) other one-time cuts ($48 million). The governor is proposing budget cuts, new savings, improved tax collections, and money from cash reserves totaling $455 million for the 2010 budget year that begins July 2009. That plan includes (a) targeted cuts to agencies ($209 million); (b) increased tax collections ($34 million); (c) GSD and DoIT savings ($12 million); and (d) cash from reserves ($119 million).” *** Office of the Governor, January 15, 2009: “Governor Bill Richardson today outlined his expanded education agenda for the upcoming legislative session. . . . Two years ago, Governor Richardson signed legislation to fund a task force to study the funding formula that New Mexico has used for more than 30 years. It found the funding formula is outdated and underfunds schools, particularly smaller and rural schools, by $350 million. The Governor supports changing State Laws so that voters, rather than the Legislature, decide how changes to the formula will be funded. Other education initiatives the Governor will be pushing for include: (a) requiring students to be in the classroom 180 days and moving teacher professional development outside of the instruction day; (b) increasing math requirements for K-8 teachers by 3 credit hours; (c) strengthening the Public Education Department’s ability to sanction school districts that do not adhere to audit requirements; (d) expanding the College Affordability Fund Scholarship to increase the number of students who can receive assistance; (e) putting all of the 3% Scholarships into need-based aid; (f) creating a division within the Higher Education Department to coordinate all major initiatives targeted toward Native American students; and (g) expanding dual credit opportunities so that Native American students can take advanced classes and earn credit toward graduation at Tribal and other colleges.” *** Office of the Governor, January 20, 2009: Governor Bill Richardson delivered the 2009 State of the State address today to kick off the 60-day session of the State Legislature. After reviewing accomplishments, the Governor said that “everyone understands why this must be the Year of Fiscal Restraint. . . . This year, I’m proposing a four-part economic security plan (which) will do the following: (a) create new jobs; (b) build a better workforce; (c) renew our role as an innovation State; and (d) provide a safety net to catch those who fall. The engine of this economic plan is a strong, responsible, and balanced budget. . . For the last six years, I’ve staunchly defended a 10 percent reserve -- or rainy day fund. But if our national economy is the weather, then it’s raining -- hard. So I propose that we draw down our rainy day fund from 10 to 8 percent.” The governor advocated continuing to invest in pre-kindergarten, and he also reiterated proposals in his expanded education agenda (released on January 15, above). *** New Mexico Independent, January 28, 2009: “The Health Security Act received strong endorsements from its sponsors at a press conference at the Roundhouse (the Legislature’s meeting place) on Tuesday (January 27). Adoption of the act would trigger a three-year process for implementing a comprehensive plan that would provide everyone in New Mexico health care coverage. The act does this by creating a statewide cooperative that would be financed by combining tax dollars already spent on health care, like Medicaid, with premiums from individuals plus employer contributions. The outcome would be a significant reduction in administrative costs, leading to greater affordability and significant cost savings to the state, primarily because everyone in the state would have coverage.” Sponsors of the bill are Rep. Bobby Gonzalez, D-Taos and State Senator Carols Cisneros, D-Questa. *** Office of the Governor, January 29, 2009: “Governor Bill Richardson today announced additional fiscal restraint measures aimed at reducing spending and saving money within the Governor’s Office and among State employees under the Governor’s authority. . . . The Governor already identified a 4 percent reduction in the Governor’s Office annual budget. Today, the Governor took several additional steps to further reduce spending, including . . . temporary 2-percent pay cut for all exempt employees under his authority, including those in the Governor’s Office; . . . close Governor’s Albuquerque and Las Cruces Offices; . . . reduce Governor’s security by 14 percent; . . . (d) cut Governor’s Contingency Fund by 10 percent; . . . and limit use of State aircraft. . . . Governor Richardson also announced an expansion of several cost-saving measures put into place in recent months, including: (a) statewide hiring freeze to continue through June 30, 2010; only critical hiring will be allowed; (b) salaries will remain frozen through June 30, 2010; freeze applies to general salary increases; (c) keep 1,000 positions, or 5 percent of the State workforce, vacant through June 30, 2010; (d) suspend the practice of compensatory time for exempt employees; (e) continue the freeze on non-essential overtime for classified employees through June 30, 2010; (f) suspend the practice of allowing exempt employees to receive a buyout for unused annual leave each year.; (g) continue to reduce expenses related to travel, equipment, supplies and furniture by and require quarterly reports on savings by some agencies; (h) task the new Green Cabinet with implementing and enforcing energy conservation and efficiency strategies across government –- targeting a $2 million savings; (i) freeze upward reclassification of positions through June 30, 2010.” *** KRQE, Santa Fe, February 6, 2009: By Friday evening (February 6), Governor Richardson “had signed the last of the four-bill package to cut current-year spending, accelerate corporate income-tax collections and pull back money previously approved for big-ticket projects. . . . There is good news for education, though, which will see funding cut by only 1 percent instead of 2.5 percent. An extra $35.8 million came out of a rainy day fund that is specifically geared toward education reform. Richardson also said he is confident President Obama's stimulus plan will keep the state from having to cut the school year by a day and increase class sizes. . . . Legislators are still working on next year’s budget which kicks in on July 1.” The legislation also transfers money from another State reserve fund and moves funds from cash balances of some agencies and programs to the State’s main budget account. *** Legislative Finance Committee, February 15, 2009: The Legislative Finance Committee’s February report says that “revenues in FY 2010 will decline by another $282 million. Compared to FY 2009 appropriations before the solvency plan, revenues are down $575 million. FY 2011 will grow but FY 2008 levels will not be regained until FY 2013. . . Federal stimulus should help but probably won’t impact the economy until FY 2011.” *** KOB Eyewitness News4, Albuquerque, March 22, 2009: “As the New Mexico legislature wrapped up another session Saturday (March 21), one ominous number remained on the minds lawmakers: $100 million. That is how much money the withered up economy is draining from the State's revenue stream. And that will almost certainly mean a special session later this year where more budget tightening could take place. Senate leader Tim Jennings said although lawmakers weren't completely satisfied with the $5 billion budget, it's important they continue to reach across party lines.” (Note: The Governor subsequently signed the budget.) *** Office of the Governor, April 3, 2009: “Governor Bill Richardson announced today that New Mexico will be receiving a portion of the $5 billion for the Temporary Aid to Needy Families (TANF) program through the new Emergency Fund established by the American Reinvestment and Recovery Act. New Mexico is anticipating receiving $35.8 million which can be used in 2009 and 2010 to help serve more families. . . . Two New Mexico Tribes that administer their own TANF programs could receive up to $15.5 million.” *** Office of the Governor, April 9, 2009: “Governor Bill Richardson announced today that New Mexico will receive $2.9 million from the U.S. Department of Education over the next two years to provide services to 800 more families in the Department of Health’s Family, Infant, and Toddler Program. The funding will likely generate about 30 developmental specialist and therapy jobs in communities across New Mexico. The money is part of the American Recovery and Reinvestment Act of 2009.” *** Office of the Governor, April 9, 2009: “Governor Bill Richardson today signed three bills aimed at bringing more accountability and higher standards to New Mexico’s public schools, including a measure to ensure students receive a full 180 days of instructional time; increased math requirements for elementary and middle school teachers; and sanctions for school districts that fail to submit timely audits.” (NOTE: These provisions were in the Governor’s expanded agenda -- see January 15 above.) *** Office of the Governor, May 8, 2009: “Governor Richardson met earlier this week with leaders of 21 of the Tribes, Nations, and Pueblos of New Mexico at the first State-Tribal Leaders Summit. Hosted by the Pueblo of Acoma, tribal and State leaders met to promote dialogue and collaborative problem-solving for a number of issues raised by both the tribes and the State. . . . (This includes) working closely with the tribes to ensure that tribes compete for and receive the maximum amount of American Recovery and Reinvestment Act funding available. The Governor also added two Native Americans representatives to the federal stimulus funding Competitive Grants Advisory Team.” Additional commitments of the Governor are described. *** Office of the Governor, May 22, 2009: Governor Bill Richardson “pledged $2 million to restore most of the money that was planned to be cut from the State’s General Assistance Program. . . . Cash benefits will be restored to $245 per month, rather than the $170 that was proposed under new rule changes. . . . The Governor will use $2 million in federal stimulus funds to help plug the budget gap in the program. . . . ‘This cash infusion will enable the program to survive the entire budget year and provide a safety net for our most vulnerable citizens who are counting on this monthly cash,’ Governor Richardson said. ‘It will be up to the Legislature to act responsibly during the next session and do its share to fund this program at an acceptable level.’” _________________________________ Governor Bill Richardson Outlines Plan to Cut State Spending, Office of the Governor, October 17, 2008: http://www.governor.state.nm.us/press/2008/oct/101708_01.pdf New Mexico: Budget Shortfall Worsens to $454 Million, National Association of Student Aid Administrators, December 8, 2008: http://www.nasfaa.org/publications/2008/awnm121008.html Governor Bill Richardson Presents Fiscally Responsible Plan to Balance Budget, Office of the Governor, January 12, 2009: http://www.governor.state.nm.us/press/2009/jan/011209_01.pdf *** To see the Governor’s recommendations for public schools: http://www.nea-nm.org/2002legislature/2009%20legislature/files/Gov%20public%20school.pdf Governor Richardson Announces Expanded Education Initiatives for 2009 Legislative Session, Office of the Governor, January 15, 2009: http://www.governor.state.nm.us/press/2009/jan/011509_01.pdf Governor Bill Richardson Delivers 2009 State of the State Address, Office of the Governor, January 20, 2009: http://www.governor.state.nm.us/press/2009/jan/012009_01.pdf Lawmakers Unveil Three-Step, Universal Health Reform Bill, New Mexico Independent, January 28, 2009: http://newmexicoindependent.com/16519/legislators-advocate-for-the-health-security-act Governor Bill Richardson Announces New Spending Cuts in Governor’s Office, State Government, Office of the Governor, January 29, 2009: http://www.governor.state.nm.us/press/2009/jan/012909_01.pdf Governor Signs Budget Reductions, KRQE, Santa Fe, February 6, 2009 http://www.krqe.com/dpp/news/politics/politics_krqe_santa_fe_governor_signs_budget_reductions_200902062000 February 2009 Consensus Revenue Estimate, Legislative Finance Committee, February 15, 2009: http://www.nmlegis.gov/lcs/lfc/lfcdocs/publications/February%202009%20Rev%20Testimony.pdf Budget Woes Linger for NM Lawmakers, KOB Eyewitness News4, Albuquerque, March 22, 2009: http://www.kob.com/article/stories/S843948.shtml *** The FY 2009-2010 budget, passed on March 21, includes reductions in the amount the State pays into public pension funds -- See details in Forbes: http://www.forbes.com/feeds/ap/2009/04/07/ap6266439.html Governor Bill Richardson Announces New Mexico to Receive $35 Million in Emergency Funds for the Temporary Assistance to Needy Families Program, Office of the Governor, April 3, 2009 http://www.governor.state.nm.us/press/2009/april/040309_02.pdf Governor Bill Richardson Announces New Mexico to Receive Funding for Young Children with Disabilities, Office of the Governor, April 9, 2009: http://www.governor.state.nm.us/press/2009/april/040909_02.pdf *** In early April, the Governor also announced several other programs that are benefitting from federal stimulus funds -- See news releases at: http://www.governor.state.nm.us/press/2009/press-apr09.php Governor Bill Richardson Signs Education Bills, Office of the Governor, April 9, 2009: http://www.governor.state.nm.us/press/2009/april/040909_05.pdf Governor Bill Richardson Announces Results of First-Ever Tribal Leaders Summit, Office of the Governor, May 8, 2009: http://www.governor.state.nm.us/press.php?id=1191 Governor Bill Richardson Pledges $2 Million to Restore Cash Payments for Struggling New Mexicans, Office of the Governor, May 22, 2009: http://www.governor.state.nm.us/press/2009/may/052209_02.pdf
New York State: One Budget After Another, Closure in April, and Continuing Problems Compiled from several sources named in the text and in the links below
*** New York Times, October 28, 2008: “Governor David A. Paterson said that the State’s budget deficit had swelled to a projected $47 billion over the next three and a half years amid a worsening global financial crisis. . . . The State is now projecting that, as a result of the crisis and its ripple effects, New York will lose 160,000 private-sector jobs between now and the end of 2009, and face a sharp drop in income tax and corporate tax revenue. . . . The Governor has scheduled a special legislative session for Nov. 18 and wants lawmakers to cut more than the $1.5 billion deficit in the current year’s budget. He said he hoped that they would present him with advance proposals for $2 billion in cuts by Nov. 7.” *** New York Times, November 9, 2008: On November 9, Governor David A. Paterson said “he would almost certainly seek billions of dollars in cuts to Medicaid, as well as midyear reductions in school aid, to address New York’s worsening fiscal condition. . . . Asked if the cuts for education and health care programs would be in the billions of dollars next year, he said, ‘Unquestionably.’ . . . Some of the cuts will be sought when lawmakers return to Albany on Nov. 18 for a special session to help close a $1.5 billion budget gap for the current fiscal year, which ends in March, and to get an early start on next year’s budget. . . . And the Governor will have to propose far steeper cuts when he introduces a budget next month for the fiscal year that ends in March 2010 — that budget will need to close a $12.5 billion deficit. *** Office of the Governor, November 12, 2008: In advance of a second special emergency session of the State Legislature on November 18, “Governor David A. Paterson today announced a comprehensive, two-year $5.2 billion deficit reduction plan . . . . (which) would close the State’s $1.5 billion current-year shortfall, while also providing a $548 million cushion against additional declines in revenue during 2008-09. These proposed actions would also reduce the State's 2009-10 deficit from $12.5 billion to $8.8 billion and four-year budget deficit by from $47.0 billion to $35.9 billion. . . . Proposed reductions are spread across virtually every area of State spending, including education, health care, human services, the State workforce, and others. . . . The accompanying summary of issue areas shows, among other things, that (a) in education, “savings would be achieved by slowing the growth of formula-based School Aid and making targeted reductions in certain categorical programs;” (b) “savings of $36 million in 2008-09 and $16 million in 2009-10 will be achieved through reductions in education-related programs outside of School Aid including Library Aid, Bundy Aid to private colleges, arts grants, and aid to nonpublic schools;” (c) “savings in the area of higher education totaling $115 million in 2008-09 and $233 million in 2009-10 would be achieved by increasing SUNY and CUNY resident undergraduate tuition, and reducing aid for community colleges and statutory colleges;” (d) in Medicaid/Health, “this proposal reduces the rate of growth in the Medicaid program in 2008-09 and begins to address unsustainable growth projected in 2009-10; according to the most recent federal data, New York spends more per capita ($2,283) on Medicaid than any other state in the country and more than twice the national average ($1,026); (e) in Social Services, “savings totaling $20 million in 2008-09 and $75 million in 2009-10 would be achieved by closing underutilized youth facilities and making targeted spending reductions in several social services programs.” *** New York Times, November 19, 2008: The governor had called a one-day emergency session (on November 18) to get the State Senate and Assembly to vote on a package of $2 billion in savings, including cuts to Medicaid, the education budget and the state university system. . . . Before Mr. Paterson and the legislative leaders could hammer out the final details, the Senate’s Republican leader, Dean Skelos, announced . . . that was prepared, then and there, to call for a vote on the governor’s draft plan. In raw, unmediated form, that plan was sure to lose. The governor had no choice but to cancel the proceedings and send everyone home. Mr. Paterson is expected to announce his new budget for the next fiscal year in mid-December, a month ahead of schedule.” *** Division of the Budget, New York State, December 16, 2008: “Governor Paterson today delivered a balanced Executive Budget, more than one month prior to the State constitutional deadline, which would eliminate the largest budget deficit in State history – a $1.7 billion current-year shortfall and a $13.7 billion 2009-10 deficit. . . . (The Executive Plan) contains two main components, both of which were delivered to the Legislature today. The first component is a 2008-09 Deficit Reduction Plan. This stand-alone legislation includes a series of actions that are necessary to close the State’s current-year $1.7 billion shortfall. The State financial plan assumes enactment of these actions by February 1. The second component is Governor Paterson’s complete 2009-10 Executive Budget proposal, which will close the 2009-10 fiscal year $13.7 billion deficit.. . . . The proposal includes $1.0 billion in proposals that were originally put forward for consideration by the Legislature at a November special session as part of an overall $2.0 billion package. . . . The Executive Budget reduces School Aid in 2009-10 by $698 million or 3.3 percent from 2008-09 while maintaining a commitment to both long-term increases in education investments and the formulas created to equitably allocate these funds. Even after reductions, funding for School Aid would still total $20.7 billion in 2009-10, a 42 percent or $6.2 billion increase compared to 2003-04. Proposed reductions are structured progressively based on district fiscal resources and student need. Savings are also achieved through reductions or eliminations in categorical programs to prevent further reductions in direct aid to schools. Governor Paterson remains committed to the education investment plan advanced in 2007-08 to increase School Aid by $7.0 billion over a multi-year period. But significant funding increases in Foundation Aid and Universal Prekindergarten that were scheduled to be phased-in over a four-year period will now be phased-in over an eight year period to reflect the need to adapt to the difficult fiscal environment. The Executive Budget also proposes mandate relief measures to help school districts control costs. . . . Based on the recommendations of the New York State Commission on Higher Education, the Executive Budget would establish the New York Higher Education Loan Program (NYHELPs) which will provide a minimum of $350 million in loans to approximately 45,000 New York State residents attending New York higher education institutions. The loans will be offered at rates well below those currently available in the private loan market.” *** Office of the Governor, January 7, 2009: In his State of the State address, Governor Patterson stressed the need to balance the budget and laid out a policy agenda that includes “one of the most ambitious clean energy plans in the nation, setting a ‘45 by 15’ goal that 45 percent of New York State’s electricity needs will be met through improved energy efficiency and greater use of clean renewable energy by 2015. This goal will also create 50,000 new jobs for New Yorkers. Governor Paterson also announced that he will introduce legislation to expand family health coverage to cover family members up through the age of 29 and he laid out a five-point plan to address the growing obesity epidemic that now affects one in four children in the State of New York.” Education proposals include (a) expanding public-private partnerships across New York to improve education outcomes and reduce the dropout rate, and (b) establishing a $350 million NY State Higher Education Loan Program to provide affordable loans to students in need. (NOTE: The State Assembly’s Finance Committee and Ways and Means Committee subsequently announced a Joint Legislative Hearing schedule on the 2009-2010 Executive Budget. Hearings on programmatic areas of the budget began January 13 and continue through February 4.) *** Division of the Budget, State of New York, January 16, 2009: “Governor David A. Paterson today released his 30-day amendments to the Executive Budget. . . . Governor Paterson’s amendments authorize only $1.35 million in additional spending for two programs in a $121.1 billion overall budget. The amendments include $350,000 in financial resources for the ‘Say Yes to Education Scholarship Program,’ which was proposed in Governor Paterson’s State of the State address. As part of a joint public/private partnership with Say Yes to Education Inc., a pilot initiative will be created to provide full scholarships that cover all college tuition and fee costs for eligible Syracuse City School District high school graduates who enroll in associate and baccalaureate programs at SUNY and CUNY institutions. The amendments also include $1 million in funding for civil legal services for indigent plaintiffs.” *** Office of the Governor, February 3, 2009: “Governor David A. Paterson, Senate Majority Leader Malcolm A. Smith and Assembly Speaker Sheldon Silver today announced a plan to fully close the State’s current-year $1.6 billion deficit. The agreement does not include the use of either potential federal stimulus funding or resources from the State’s rainy day reserves. . . . In addition to closing the State’s current-year $1.6 billion shortfall, the plan will also put a down payment of $800 million on next year’s deficit, reducing the 2009-10 budget gap from $13.8 billion to $13 billion. . . . Since taking office, Governor Paterson has worked with the Legislature to enact over $3 billion in current-year savings to address a dramatic decline in revenues related to a national economic crisis. These include nearly a $1 billion (10 percent) reduction in agency spending, over $400 million in savings at an August Special Session, and today’s $1.6 billion Deficit Reduction Plan.” Major areas of deficit reduction include (a) higher education (tuition increase); (b) local government; (c) human services; (d) workforce; (e) health care; (e) miscellaneous. (Note: The Legislature must balance the 2009-10 budget by April 1.) *** New York Times, February 11, 2009: “New York State lawmakers agreed to increase the unemployment benefit allocation to $5 billion, significantly more than the $3 billion originally set in this year’s budget. State officials estimate that 25,000 New Yorkers file new claims for unemployment benefits every week, twice the rate of a year ago. In December, the State’s unemployment rate rose to 7 percent, from 6 percent in November. Currently, more than 420,000 State residents are collecting unemployment checks, up from about 175,000 a year ago, according to Gov. David A. Paterson’s office. *** Central New York Business Journal, February 11, 2009: “An annual report from the New York State Assembly indicates the revenue figure for the 2009-10 State budget won't be as high as Gov. David Paterson has previously forecast. In a report issued today, Assembly Speaker Sheldon Silver says his chamber anticipates a revenue figure of $119 billion, about $1 billion below Paterson's estimate.” *** Office of the Governor, February 14, 2009: “Governor David A. Paterson today announced that a preliminary analysis of the American Recovery and Reinvestment Act shows New York can expect to receive at least $24.6 billion over the next two years. This critical legislation will provide significant funding for State fiscal relief, as well as for education aid, infrastructure projects, direct benefits to low income and unemployed New Yorkers, and other critical priorities. . . . Governor Paterson this week created the New York State Economic Recovery and Reinvestment Cabinet to manage the development of State and local infrastructure projects financed through these federal fund.” The State has launched a website to allow New Yorkers to track how federal dollars are being spent. *** Office of the Governor, March 5, 2009: In a statement issued on March 5, Governor Paterson said that “The latest unemployment numbers, released today by the Department of Labor, are unprecedented and serve as stark reminder of the economic crisis that our State is facing. More than 125,000 New Yorkers have lost their jobs in the last six months. The increase in the unemployment percentage over the last two months is the largest such increase in New York State in at least 20 years. Currently, almost half a million New Yorkers are collecting unemployment benefits. . . . The Department of Labor is working to distribute more than $200 million in job training funds throughout the State to prepare today’s unemployed for tomorrow’s opportunities. The Department also announced that the federal economic recovery package will benefit the more than one million New Yorkers collecting unemployment insurance.” *** Office of the Governor, March 24, 2009: “Governor David A. Paterson, Majority Leader Malcolm A. Smith, and Speaker Sheldon Silver today announced that projected State revenues will decline by an additional $2.2 billion through the end of the 2009-10 fiscal year. Combined with the impact of the $1 billion loss in tax collections agreed to through the revenue consensus process on February 24, the overall decline in anticipated State revenues since the passage of the 2008-09 Deficit Reduction Plan on February 3 now totals $3.2 billion. . . . After the passage of the 2008-09 Deficit Reduction Plan, the State’s projected 2009-10 budget gap totaled $13 billion. Since that time, projected revenues have declined by an additional $3.2 billion.” *** Daily News, New York City, March 24, 2009: “Governor Paterson ordered 8,900 State jobs slashed Tuesday (March 24) to help close a budget deficit that has ballooned by another $2.2 billion. While some jobs will be lost through attrition, the bulk will be through layoffs that would begin in July.” *** Office of the Governor, March 29, 2009: In a press release, Governor Paterson stated that, through the federal stimulus funds, “State school aid will total approximately $21.9 billion in 2009-10, an increase of $405 million or 1.9 percent. This reflects the elimination of a proposed $1.1 billion Deficit Reduction Assessment through the use of American Recovery and Reinvestment Act (ARRA) aid. When combined with other federal economic recovery aid through Title I of the Elementary and Secondary Education Act ($454 million) and Individuals with Disabilities Education Act programs ($398 million), support for school districts is expected to increase by $1.2 billion. The 2009-10 Executive Budget included $20.7 billion for School Aid. Overall, due to the additional financial resources provided through ARRA, the Enacted Budget provides an additional fiscal benefit to school districts of $2 billion.” Details about major education programs are included. *** New York Times, April 3, 2009: “The Legislature completed action on the State budget Friday after a week of debate, passing the $131 billion spending plan for the fiscal year that began on Wednesday (April 1). . . . But the document may only be a first draft. (Governor Paterson) has warned that it is likely to be reopened this year amid declining state tax revenues and Wall Street’s troubles. . . . It was still not clear how much State spending would grow. The governor has said the budget . . . keeps State spending essentially flat. But the figures his budget division has released exclude how much the State will pay this year in debt service, providing an incomplete picture. . . . The budget’s impact will be broadly felt. The Legislature is raising tuition for students at publicly funded universities and is using much of that money to balance the budget. The budget also slows the growth of spending on education and Medicaid. Overall, there is a greater reliance on taxation than the governor had proposed, and a reliance on temporary help from Washington.” ***Office of the Governor, April 7, 2009: “Governor David A. Paterson today announced that millions of dollars in funding, provided through the American Recovery and Reinvestment Act (ARRA), will support the State’s health and human services infrastructure and programs. Low-and moderate-income individuals and families in New York’s Upstate counties will receive an estimated $400 million in additional Food Stamp benefits from ARRA funds. Beginning with the April monthly allotment, households across New York participating in the State’s Food Stamp program will see an increase of 13.6 percent in their current monthly Food Stamp benefit. In addition, Governor Paterson announced that $26.5 million in ARRA funding has been awarded to support construction and expansion projects of federally qualified health centers, and to support services and payments for the increase in uninsured patients seeking care.” *** Division of the Budget, April 28, 2009: “The Division of the Budget today released the State’s official 2009-10 Enacted Budget Financial Plan, which includes updated information on the gap-closing plan, federal stimulus recovery funding, State revenues, State spending, out-year deficits, the State workforce, and other financial indicators. The 2008-09 Deficit Reduction Plan and 2009-10 Enacted Budget closed a combined $20.1 billion deficit and reduced New York’s multi-year deficits by more than 70 percent. Additionally, State Operating Funds spending, which reflects spending financed by State taxpayer dollars, increased by 0.7 percent – the smallest increase in 14 years.” *** Office of the Governor, May 9, 2009: “Governor David A. Paterson today was joined by New York City Mayor Michael Bloomberg, Congressman Charles Rangel, Congresswoman Carolyn Maloney, Congressman Gregory Meeks, and State and City officials in announcing nearly $100 million in federal funding for job creation, a portion of which will be used to assist New York’s lower-income youth in finding summer employment. The American Recovery and Reinvestment Act (ARRA) will provide $61 million in funding, and an additional $35 million will be provided through the federal Temporary Assistance for Needy Families (TANF) block grant program, creating jobs for New York’s lower-income youth statewide. These initiatives are critical in light of the soaring youth unemployment rate across the State.” This news release includes information on AARA and TANF allocations for New York State regions. *** Office of the New York State Comptroller, May 14, 2009: In his report on the Enacted 2009-2010 State Budget, State Comptroller DiNapoli “noted that spending will rise from $121.6 billion in 2008-09 to a projected $145 billion by 2012-13. He said the State’s projected three-year budget gap will be nearly $25 billion. DiNapoli said these gaps could grow larger if the economic downturn is prolonged. He pointed out that the Governor’s initial budget proposal relied more on spending cuts than new revenues, but that mix was reversed during the legislative process, creating an unsustainable level of spending in future years. . . . DiNapoli said Governor Paterson’s spending cap proposal should serve as a starting point for discussions on how to control spending in future budgets. DiNapoli’s report includes several budget reform recommendations to help address the systemic problems in the State’s budget process.” A link to the full report is included. *** Office of the New York State Comptroller, May 19, 2009: “State Comptroller Thomas P. DiNapoli today reported tax revenues declined even more than anticipated in April. General Fund revenues of $4.8 billion, including transfers, were $3.8 billion or 44 percent less than last year and $239.1 million below the Governor’s April 28 projections. . . . DiNapoli’s April Monthly Cash Report released today found the General Fund closing balance for April was $60.8 million below Financial Plan projections. General Fund receipts totaling $4.8 billion were $239.1 million below projections and disbursements of nearly $4 billion were $177.8 million below projections. Personal income taxes of $2.9 billion and business taxes of $61 million were significantly below April 2008 receipts (48.9 percent and 41.4 percent).” *** The Business Review, Latham NY, May 20, 2009: “Gov. David Paterson signed a bill today that extends unemployment benefits an extra 13 weeks. Legislative leaders sped the bill through the State Senate and Assembly, because 56,000 New Yorkers were scheduled to go off unemployment at the end of this week. Now unemployment benefits for those people, and 64,000 others, will continue uninterrupted. . . . The statewide unemployment rate was 8.1 percent in March, not adjusted for seasonal variances. That is 3.1 percent higher than the same time a year ago.” *** Office of the New York State Comptroller, May 30, 2009: “New York State Comptroller Thomas P. DiNapoli today released a preliminary estimate indicating the rate of return for the New York State Common Retirement Fund assets was a negative 26.3 percent, with the Fund value declining to approximately $109.9 billion for the fiscal year that ended March 31, 2009. . . . DiNapoli said the market downturn would require higher employer pension contribution rates in future years, and he announced proposed legislation to give State and local government employers an option to manage those expected increases. . . . Benefits remain safe and secure, but the stock market’s dive will increase contribution rates for local governments beginning in 2011. . . . In September, DiNapoli will announce contribution rates for 2011. DiNapoli is proposing the legislation now to provide State and local government officials as much time as possible to prepare for the increased contribution rates.” *** New York Times, June 5, 2009: “Gov. David A. Paterson and the State’s public employee unions announced an agreement on Friday (June 5) that would reduce pension benefits for future public employees and save the State billions of dollars in an attempt to control ballooning costs for retirees. . . . Mr. Paterson will shelve his plan to lay off 8,700 workers and will drop a proposal to require existing workers to give up their 3 percent annual pay raise this year and to defer a week’s pay. In addition, 4,500 workers will be offered $20,000 buyouts. . . The agreement requires legislative approval. . . . The deal covers State workers and local governments outside New York City; the Paterson administration hopes to negotiate a similar agreement for New York City employees.” *** Bloomberg, New York City, June 9, 2009: “Republicans reclaimed control of the New York State Senate with help from two Democrats, who rebelled against a $131.8 billion budget they said was negotiated in secret. Pedro Espada from the Bronx and Hiram from Queens sided with 30 Republicans on key votes to change the Senate’s leadership. Democrats immediately challenged the claim and described the action as illegal.” _________________________________ Paterson Sees a Budget Gap of $47 Million, New York Times, October 28, 2008: http://www.nytimes.com/2008/10/29/nyregion/29paterson.html Paterson Says Schools and Medicaid Face Cuts, New York Times, November 9, 2008: http://www.nytimes.com/2008/11/10/nyregion/10budget.html?pagewanted=1&_r=1&th&emc=th Governor Paterson Delivers $5.2 Billion, Two-Year Deficit Reduction Plan, Office of the Governor, November 12, 2008 -- Budget presentation and click for budget publications: http://www.ReduceNYSpending.gov/News/rnys_news11122008.html So Mr. Skelos, What’s Your Plan?, New York Times. November 19, 2008: http://www.nytimes.com/2008/11/20/opinion/20thu2.html?_r=1&th&emc=th Governor Paterson’s Executive Budget Eliminates Largest Deficit in State History, Reins in Spending, Division of the Budget, December 16, 2008: http://www.budget.state.ny.us/pubs/press/2008/press_release08_eBudget0910-1.html State of the State Address, Office of the Governor, January 7, 2009 -- Press release and fact sheets: http://www.ny.gov/governor/press/press_0107091.html Governor Paterson Submits 30-Day Budget Amendments To the Executive Budget, Division of the Budget, New York State, January 15, 2009: http://www.budget.state.ny.us/pubs/press/2009/press_release09_30DayAmendments.html Governor Patterson, Majority Leader Smith, and Speaker Silver Announce Agreement To Close Current-Year $1.6 Billion Deficit, Office of the Governor, February 3, 2009: http://www.ny.gov/governor/press/press_0203093.html Vast Expansion in Unemployment Rolls, New York Times, February 11, 2009: http://cityroom.blogs.nytimes.com/2009/02/11/vast-expansion-in-unemployment-rolls/ State Assembly Budget Revenue Forecast Is More Bleak Than Governor’s, Central New York Business Journal, February 11, 2009: http://www.cnybj.com/index.php?id=396&tx_ttnews%5Btt_news%5D=9762&tx_ttnews %5BbackPid%5D=1&cHash=412e308eaf Governor Paterson Announces AARA Includes at Least $24.6 Billion in Funding for New York, Office of the Governor, February 14, 2009: http://www.ny.gov/governor/press/press_0214091.html New York’s Guide to the 2009 American Recovery and Investment Act, Office of the Governor, February 23, 2009: http://www.economicrecovery.ny.gov/ Statement from Governor David A. Paterson, Office of the Governor (on the latest unemployment report), March 5, 2009: http://www.ny.gov/governor/press/press_0305094.html Governor Paterson, Majority Leader Smith and Speaker Silver Announce Additional $2.2 Billion Decline in Projected State Revenues, Office of the Governor (on the latest unemployment report), March 24, 2009: http://www.ny.gov/governor/press/press_0324091.html Gov. David Paterson Orders Layoffs of 8,900 New York State Employees Amid Economic Downturn, Daily News, New York City, March 24, 2009: http://www.nydailynews.com/news/2009/03/24/2009-03-24_gov_david_paterson_orders_layoffs_of_890.html Governor Paterson Announces Federal Economic Recovery Aid Will Provide Major Additional Funding for Education, Office of the Governor, March 29, 2009: http://www.ny.gov/governor/press/press_0329095.html N.Y. State Passes $131 Billion Budget, New York Times, April 3, 2009: http://www.nytimes.com/2009/04/04/nyregion/04budget.html?ref=nyregion *** Click under the picture at the right for budget details: http://www.budget.state.ny.us/ Governor Paterson Announces Economic Recovery Funds for Health and Human Services, Office of the Governor, April 7, 2009: http://www.ny.gov/governor/press/press_0407092.html Division of the Budget Releases Enacted Financial Plan (2009-2010), April 28, 2009 -- Overview and click for the budget: http://www.budget.state.ny.us/pubs/press/2009/press_release09_enactedReport0428.html Governor Paterson, Mayor Bloomberg, Congressional Delegation Put New York’s Lower-Income, Unemployed Youth to Work, Office of the Governor, May 9, 2009 -- Scroll down for AARA and TANF allocations for New York State regions: http://www.ny.gov/governor/press/press_0509092.html DiNapoli Calls for Reforms to State Budget Process, Office of the New York State Comptroller, May 14, 2009 -- Click for the full report: http://www.osc.state.ny.us/press/releases/may09/051409.htm DiNapoli: Tax Revenues Lower Than Expected, Office of the New York State Comptroller, May 19, 2009 -- Click for the complete April 2009 cash flow report: http://www.osc.state.ny.us/press/releases/may09/051909b.htm Unemployment Benefits Extended 13 Weeks, The Business Review, Latham NY, May 20, 2009: http://www.bizjournals.com/albany/stories/2009/05/18/daily28.html New York State Pension Fund Declines 26 Percent, Office of the New York State Comptroller, May 30, 2009: http://www.osc.state.ny.us/press/releases/may09/052909.htm *** Also see coverage in the New York Times: http://www.nytimes.com/2009/05/30/nyregion/30pension.html?ref=nyregion Paterson and Unions Agree on Limits for New Pensions, New York Times, June 5, 2009: http://www.nytimes.com/2009/06/06/nyregion/06pension.html?_r=1&th&emc=th *** Also see the Governor’s statement on the pension agreement: http://www.ny.gov/governor/press/press_0605093.html N.Y. Senate Goes Republican, Aided by Two Democrats, Bloomberg, New York City, June 9, 2009: http://www.bloomberg.com/apps/news?pid=20601087&sid=aiq_YGCzi630
North Carolina: Large Shortfalls in the State Budget, State Employee Health Plan, and State Pension Plan Compiled from several sources named in the text and in the links below.
*** Office of the Governor, July 16, 2008: “Governor Mike Easley signed House Bill 2436 into law on July 16, 2008, to establish the State’s $21.4 billion budget for the 2008-2009 fiscal year. The budget reflects a 3.2 percent increase in State spending over the previous year, and it provides $11.4 billion for the State’s public schools, universities, and community college. The budget earmarks $7,802,046,538 in State spending for public schools and reflects a 1.22 percent increase over the previous year’s State budget for K-12 education.” *** North Carolina Association of School Administrators, November 20, 2008: “North Carolina’s 115 public school systems have been instructed to revert $58 million in State funding, while charter schools must return $1.4 million as part of State agencies’ efforts to make up a budget shortfall expected to exceed $1 billion for the current fiscal year. . . . The total cuts of $117 million for local school districts and the Department of Public Instruction reflect 4 percent of the total State funding for public schools for the current fiscal year and are in response to a directive Governor Mike Easley has sent all State agencies, in which he asked most to trim as much as 5 percent.” *** Office of the Governor, December 10, 2008: “In a memo to department heads and chief fiscal officers of all State departments, institutions, and agencies, Governor Easley wrote that “the impact of the national economic downturn, credit crunch, and overall volatility in the financial markets are significantly impacting revenue collections nationwide. . . . The challenge we face together in developing the FY 2009-11 biennial budget will be significant. Reducing agency expenditures will be an essential component of providing a balanced budget to Governor-elect Perdue and the General Assembly. To that end, I am requesting that each State agency develop 3%, 5%, and 7% reduction options.” NOTE: Newly elected Governor Bev Perdue was inaugurated on January 10, 2009. *** Office of the Governor, January 15, 2009: Gov. Bev Perdue today instructed State agencies to take several steps to balance North Carolina budget . . . . in response to the executive order she signed on Tuesday (January 13) after new estimates show the shortfall increasing to $2 billion. . . . The budget balancing steps include (a) require agencies to cut spending by 7 percent; this is an additional 2 percent cut, added to former Gov. Easley’s previously ordered 5 percent cut; (b) stop the purchase of all goods or services, unless specifically approved by a department head; this does not apply to the purchase of supplies, equipment, and materials schools require for classroom instruction; (c) all travel and training are suspended unless it involves public safety, public health, job requirements, economic development opportunities, or emergency situations; . . . . (d) all pay-as-you-go appropriations for capital improvement and repair and renovation projects are to be placed on hold; and (e) a hold on hiring for vacant positions, unless a prior commitment has been made.” *** Star-News, Wilmington, February 8, 2009: “Last Wednesday (February 4) a briefing was held on the State Health Plan, and legislators were told they needed to find an additional $1.2 billion during the next two years to keep the insurance pool open for State employees. . . . The State Health Plan covers about 667,000 state employees, and like the State budget, is struggling to make it to the end of the current fiscal year that ends June 30. The plan is facing a $300 million hole that must be filled by April. After that, another billion will be needed to keep the plan solvent.” *** Triangle Business Journal, Raleigh/Durham, February 19, 2009: “State Treasurer Janet Cowell wants legislators to hand over an extra $358 million over the next two years to make sure the North Carolina pension plan can meet all its obligations to retirees. The pension fund now gets about $400 million annually in State appropriation. . . . But the pension fund, which is heavily invested in stocks, took a 20 percent hit in 2008. . . . The fund is now worth about $60 billion, down from around $77 billion at the start of 2008. . . . The General Assembly already faces a budget deficit for fiscal 2010 that is estimated at about $2 billion.” *** Office of the Governor, February 25, 2009: “As part of Gov. Perdue’s ongoing efforts to manage the current fiscal year budget shortfall, she is . . . asking most State agencies for further reduction amounts from 7 percent to 9 percent. Governor Perdue will continue to protect public education as much as possible while managing the shortfall. As a precautionary step to manage cash flow, the State will transfer up to $300 million dollars from several special accounts into the General Fund. The money will be put into a reserve and may be used to support General Fund obligations if necessary.” *** WRAL-TV, Raleigh, February 26, 2009: “The latest projections call for the State budget deficit to grow to $2.2 billion by June and easily top $3 billion in the 2009-10 fiscal year. State Controller David McCoy said Monday (February 23) that State revenues fell 14.3 percent in January from a year ago, including a 21.4 percent drop in personal income tax collections. . . . Lawmakers said tax increases are the last resort and would only be added to the mix if enough cuts couldn't be made to balance the budget.” *** Winston-Salem Journal, March 2, 2009: Money originally designated for school construction will now be used to cover some of the State's budget shortfall, officials said Friday (February 27). State officials told educators throughout North Carolina that they will use about $43 million from two of the State's school-construction accounts -- lottery money and the public school building capital fund -- to balance this year's budget. It's their plan for making it through the rest of the fiscal year without asking school districts to send back more money.” *** News & Observer, Raleigh, March 7, 2009: “North Carolina is behind by at least 300,000 checks in sending out income tax refunds as officials juggle funds to give taxpayers back money. . . . Revenue officials said the State is tapping special accounts to pay refunds. . . Revenue for day-to-day operations was running $1.2 billion behind what was projected, or 9.3 percent, at the end of February, the governor's office said.” *** Office of the Governor, March 17, 2009: “Gov. Bev Perdue today announced her 2009-2010 proposed budget. Despite facing the most challenging budget situation in decades, her budget increases per-pupil spending, invests in job creation, and protects public safety through probation, mental health, and anti-gang initiatives. . . . . Gov. Perdue’s budget closes a $6.4 billion cumulative gap and reduces spending by $2.6 billion over the next two years. Her budget also utilizes $2.9 billion of federal recovery funds to support critical services and recommends a $1.3 billion revenue tax change for tobacco products and alcohol. . . . (IN EDUCATION, the Governor’s budget) includes (a) increase in K-12 per-student spending, from $5,597 to $5,736; (b) $4.7 million to implement diagnostic testing, saving $2 million by ending duplicate testing’ (c) $64 million to experience-based salary step increase for teachers; (d) $118 million overall increase in spending, including federal recovery dollars; (e) $7 million in recurring funds for innovative dropout prevention programs; (f) $3.5 million to support underperforming schools; (g) $3 million reserve for community colleges that see spike in enrollment; (h) $2.6 million to create 12 early college high schools; (i) $23 million increase to need-based financial aid. . . . In HEALTH AND HUMAN SERVICES: (a) $4.3 million increase to S-CHIP, which will be able to cover 8,000 more children for the next two years; (b) $12 million to add 111 local inpatient mental health beds; (c) $3 million to retain 36 beds at Dorothea Dix Hospital; (d) limit reductions in direct services and does not displace persons currently served by Medicaid. Many provider reimbursement rates have been frozen, but base service rates have not been reduced.” *** Employment Security Commission (ESC) of North Carolina, March 27, 2009: “North Carolina’s unemployment rate increased a full percentage point in February 2009, moving to 10.7 percent according to statistics released today. . . . The rate has increased for thirteen consecutive months and is the highest since the State started keeping seasonally adjusted data. . . . The ESC is set up to start paying an extra $25 a week to eligible claimants as part of the American Recovery and Reinvestment Act. This additional money can make a difference for families facing difficult circumstances.” *** Office of the Governor, March 30, 2009: “Gov. Bev Perdue today launched the first wave of NCOpenBook.gov, a government transparency website for searching state contracts and grants.” This includes the NCRecovery.gov website on the use of ARRA funds that was initiated in February. *** Office of the Governor, April 9, 2009: “ Effective immediately, Perdue enacted additional limitations on spending throughout State government, including freezing the purchase of goods and services, ceasing all travel not approved for public safety, public health and economic development reasons, and leaving unfilled personnel positions vacant. Exceptions may be made for direct classroom instruction expenses and emergency situations related to law enforcement, health care and public safety. (See attached memo for details.)” This follows further shortfalls in State collections. *** Economic Security Commission (ESC) of North Carolina, April 17, 2009: “North Carolina’s unemployment rate increased slightly in March to 10.8 percent, according to statistics released today by the N.C. Employment Security Commission. The rate increased by a tenth of a percentage point over-the-month from 10.7 percent.” (Compare with the ESC March 27 report, above.) *** Raleigh News & Observer, April 23, 2009: “The House and Senate adopted a compromise Wednesday that bails out the ailing State Health Plan and aims to keep it afloat for two years. The plan provides benefits for about 667,000 State employees, teachers and retirees. . . . The bill provides $250 million to keep the plan in the black this year. It reduces benefits for employees, raises premiums for spouses and children, and will cost the State more than $408 million from the general fund over the next two years.” (NOTE: The bill has been submitted for the Governor’s signature. This article provides summaries on “winners and losers” among the budget provisions at the left side of the page.) *** Office of the Governor, April 28, 2009: “Gov. Bev Perdue is taking additional steps to ensure the State’s budget is balanced on June 30, 2009. The move comes in response to an analysis by the Office of State Budget Management that indicates the budget shortfall for fiscal year 2008-09 will likely exceed $3 billion. Gov. Perdue this morning signed Executive Order 11 which implements a flexible furlough program for all State employees. This furlough equates to $65 million this year. In addition, she has identified funds to close the remaining budget gap for the fiscal year, which include capturing more special funds, tapping the state’s Savings Reserve Account, and utilizing federal recovery dollars. These measures total more than $1 billion. All teachers’ and State employees’ compensation will be reduced by an annualized amount equivalent to 0.5 percent for the remainder of the fiscal year. Each employee will receive 10 hours of flexible time off in exchange. The governor has asked the General Assembly to pass legislation holding longevity pay, unused leave, service credit, and health and retirement benefits harmless.” *** North Carolina Association of School Administrators, May 8, 2009: This article reports that “in a joint meeting of the House and Senate Appropriations Committees, legislative analysts reported that the State’s anticipated budget gap for next fiscal year has widened by $1.5 billion. In addition, House budget writers must add another $200 million to that gap because Gov. Beverly Perdue opted to use some of the federal stimulus funds to manage the State budget deficit for the year that ends June 30. The estimated shortfall (of $4.5 billion) is based on new projections generated after final tax payments fell by 40 percent compared to a year ago. For the entire year, the State is on pace to see a nearly 11 percent decline in total tax collections compared to last year. ‘The State has never experienced the types of shifts in revenue that we’re experiencing now,’ said Barry Boardman, the legislature’s chief economist.” *** Employment Security Commission (ESC) of North Carolina, May 22, 2009: “North Carolina’s unemployment rate held steady in April at 10.8 percent. . . . Employment made a small gain, while the number of unemployed workers decreased slightly. . . . Seasonally adjusted employment increased by 26,857 workers to 4,087,728. Unemployment decreased by 815 workers, to 492,785. The number of workers who were unemployed, but actively seeking work, remains near an all time high. Since this time last year, unemployment has increased by 234,421 people.” *** Eyewitness News-9, Greenville, May 22, 2009: “The U.S Secretary of Education announced more than 1 billion dollars is coming to North Carolina to help with education reform and save teaching jobs. The money comes from the American Recovery and Reinvestment Act. The State Department of Public Instruction says the money will make up for cuts that have already been made, but won’t prevent more cuts from hitting the schools hard next year.” *** Triangle Business Journal, Raleigh-Durham, June 12, 2009: “State tax collections slumped by $1.7 billion, or 10 percent, through May, leaving lawmakers with even a larger hole to fill in balancing the state’s next budget by June 30. The tax collection numbers, for the first 11 months of fiscal 2009, were released by the North Carolina Controller’s Office, which keeps track of state government cash flow and other matters. Because of the tax collection drop, officials say, the unreserved balance in the state’s general fund dropped to a negative $345 million as of May 31, as compared to a negative $285 million at the end of April.” _________________________________ Office of the Governor, Summary of the 2008 State Budget Session Law 2008-107, House Bill 2436 (Signed into Law July 16, 2008), distributed by the North Carolina Association of School Administrators: http://www.ncasa.net/associations/2410/files/2008StateBudgetSummary-ncasa_9-19-08.pdf Public Schools Feel Impact of State Budget Deficit, North Carolina Association of School Administrators, November 20, 2008: http://www.ncasa.net/associations/2410/files/budget_cuts_11-20-08.pdf Memorandum to Department Heads and Chief Fiscal Officers, All State Departments, Institutions, and Agencies re Budget Reduction Options for FY 2009-2011, Office of the Governor, December 10, 2008: http://www.osbm.state.nc.us/files/pdf_files/memo121008_BudgetReductionOptions.pdf Governor Perdue Announces Steps to Balance North Carolina’s Budget, Office of the Governor, January 15, 2009: http://www.governor.state.nc.us/NewsItems/PressReleaseDetail.aspx?newsItemID=22 Analysis: State Employee Health Plan a $1.2 Billion Crisis, Star-News, Wilmington, February 8, 2009: http://www.starnewsonline.com/article/20090208/ARTICLES/902070277/1177?Title=Analysis__State_employee_health_plan_a__1_2_billion_crisis State Treasurer Cowell: N.C. Pension Plan Needs $358M, Triangle Business Journal, Raleigh/Durham, February 19, 2009: http://www.bizjournals.com/triangle/stories/2009/02/16/daily54.html Governor Perdue Takes Additional Steps to Manage Budget Shortfall, Office of the Governor, February 25, 2009: http://www.governor.state.nc.us/NewsItems/PressReleaseDetail.aspx?newsItemID=152 Tax Increases, Furloughs on Lawmakers’ Table, WRAL-TV, Raleigh, February 26, 2009: http://www.wral.com/news/local/politics/story/4620529/ School Money Will Be Used to Plug Budget, Winston-Salem Journal, March 2, 2009: http://www2.journalnow.com/content/2009/mar/02/school-money-will-be-used-to-plug-budget/ State Is Behind on Tax Refunds, Raleigh News & Observer, March 7, 2009: http://www.newsobserver.com/politics/story/1432387.html Governor Perdue Announces 2009-2010 Budget Proposals, Office of the Governor, March 17, 2009: http://www.governor.state.nc.us/NewsItems/PressReleaseDetail.aspx?newsItemid=213 *** The Governor’s complete recommended 2009-2010 budget is at: http://www.osbm.state.nc.us/ncosbm/osbm_library/superpubs/bgt0911.shtm N.C. Unemployment Rate at 10.7 Percent in February, ESC to Begin Paying Extra $25 in Early April, Employment Security Commission of North Carolina, March 27, 2009 -- See Previous State Unemployment Rates: http://www.ncesc.com/pmi/rates/ratesmain.asp Gov. Perdue Launches NCOpenBook.gov, Office of the Governor, March 30, 2009: http://www.ncopenbook.gov/about/news/launchesNCOpenBook.aspx *** To access the NCOpenBook website: http://www.ncopenbook.gov/ *** To access the NCRecovery website (ARRA information) http://www.ncrecovery.gov/ Gov. Perdue Takes Additional Steps to Manage State’s Cash Flow , Office of the Governor, April 9, 2009: http://www.governor.state.nc.us/NewsItems/PressReleaseDetail.aspx?newsItemID=289 *** See a related article on shortfalls in Forbes: http://www.forbes.com/feeds/ap/2009/04/09/ap6276723.html N.C. Unemployment Rate Moves to 10.8 Percent in March, Economic Security Commission of North Carolina, April 17, 2009 http://www.ncesc.com/pmi/rates/ratesmain.asp State Health Plan Patched, Raleigh News & Observer, April 23, 2009 -- See “winners and losers” at the left: http://www.newsobserver.com/politics/story/1497154.html *** The State Auditor’s report on the State Health Plan for Teachers and State Employees FY 2008 Projected Versus Actual Results is available at: http://www.ncauditor.net/EPSWeb/Reports/Performance/PER-2008-7247B.pdf Gov. Perdue Takes Additional Steps to Ensure Balanced Budget, Office of the Governor, April 28, 2009: http://www.governor.state.nc.us/NewsItems/PressReleaseDetail.aspx?newsItemID=330 State Budget Deficit for 2009-10 Widens to $4.6 Billion, North Carolina Association of School Administrators, May 8, 2009: http://www.ncasa.net/displaycommon.cfm?an=1&subarticlenbr=199 *** Details about the May 2009 report of the General Assembly’s Fiscal Research Division are available at: http://www.ncleg.net/fiscalresearch/generalfund_outlook/generalfund_outlook.shtml Unemployment Rate Remains Unchanged in April, Employment Security Commission (ESC) of North Carolina, May 22, 2009: http://www.ncesc1.com/pmi/rates/ratesMain.asp More Than 1 Billion Dollars Can’t Solve the State’s Budget Woes, Eyewitness News-9, Greenville, May 22, 2009: http://www.wnct.com/nct/news/local/article/more_than_1_billion_dollars_cant_solve_the_states_education_budget_woes/37704/ North Carolina Sinks Further Into Budget Hole, Triangle Business Journal, Raleigh-Durham, June 12, 2009: http://www.bizjournals.com/triangle/stories/2009/06/08/daily65.html
Ohio: Major Reductions Across the Biennium + An Evidence-Based School Reform Plan Compiled from several sources named in the text and in the links below.
*** Office of the Governor, September 10, 2008: “Governor Ted Strickland today ordered $540 million in budget adjustments in order to make sure Ohio’s budget remains in balance. This reduction comes in addition to a $733 million budget adjustment plan announced last January, for a total of $1.27 billion in budget adjustments over the biennium. . . . The adjustment includes a 4.75 percent across-the-board cut to State agencies, after holding harmless key programs, and while also protecting tax reform passed by previous legislatures, the newly-established homestead tax cut, children’s health care expansions, the tuition freeze for state colleges and universities, and increased funding for local school districts. . . . Budget reductions announced today will result in $198 million less being spent by state agencies through June 30, 2009. The remaining $342 million shortfall will be made up through a variety of cash management actions.” *** Office of the Governor, December 2, 2008: “Governor Ted Strickland and Budget Director J. Pari Sabety today announced that the State is facing not only a budget deficit in our current fiscal year, but is projected to face an exceptionally large, more than $7 billion deficit, in the upcoming 2010–2011 operating budget. . . . Strickland said that the need to initiate additional spending reductions to balance the current budget will be largely determined by whether considerable State aid is included in the federal government’s recovery package and if robust activity occurs in retail holiday sales. Any further reductions to the current budget will be in addition to the $1.27 billion in budget adjustments already underway.” (A letter to President-Elect Obama is included at the end of this announcement.) ***Office of the Governor, December 19, 2008: “Governor Ted Strickland today ordered $640 million in budget adjustments to maintain a balanced budget as the accelerated deterioration of the national economy continues to deprive Ohio of revenue. This reduction is in addition to the $1.27 billion in budget adjustments already undertaken this year, for a total of $1.9 billion in budget adjustments over the biennium. This is in line with the Office of Budget and Management’s recession-based scenario, outlined in January 2008, which had forecast a $1.9 billion total budget deficit if the economy fell into recession. Strickland said the adjustments must be undertaken now to give State agencies ample planning time before January 1, when large subsidy payments to local communities are scheduled. ‘Ohio’s budget circumstances are substantially worse today than they were just 12 weeks ago,’ Strickland said. ‘I believe that taking this action today is necessary to make sure the State budget remains balanced and agencies have time to plan. And we are making this decision while continuing to protect the college tuition freeze and foundation funding for local schools.’ . . . Budget reductions announced today will result in $180.5 million less being spent by State agencies through June 30, 2009. The remaining $460 million shortfall will be made up through Medicaid spending adjustments and various cash management strategies.” *** The Morning Journal, Cleveland, December 31, 2008: “The Ohio Department of Mental Health's budget has been sliced by $38 million this year, with another $30 million scheduled to be trimmed next month. The Ohio Department of Alcohol and Drug Addiction Services has lost 2.5 percent of its budget or $5 million. . . . Mental health and addiction treatment services are being closed in a number of counties throughout the State.” *** Columbus Dispatch, January 23, 2009: “Faced with a frightening financial future, Ohio University is considering employee buyout packages to stave off widespread layoffs. Trustees voted today (January 23) to give President Roderick J. McDavis the authority to offer some incentives for employees to leave voluntarily before the board meets again in April. . . . The school already has saved $7.6 million when 324 workers left under two previous voluntary separation packages. . . . The proposals on the table are (a) encouraging as many as 396 administrators and classified workers either to retire early or leave with extra retirement benefits; the university would buy those retirees an extra year of service under the Ohio Public Education Retirement System; . . . (b) making 64 administrators, classified staff and faculty members who have alternative retirement plans eligible to retire; . . . (c) allowing 754 employees from all job categories, with 15 years to 23 years of service, to be eligible for a one-time buyout.” *** Office of the Governor, January 28, 2009: In his State of the State address, Governor Ted Strickland said that “for the first time since the personal income tax was enacted in Ohio, we are projecting a three-year decline in income tax revenue. For the first time since 1950, we are projecting a two-year decline in sales tax revenue. For the first time in a half century, Ohio’s general revenue taxes have declined two years in a row. . . . The budget I will present next week will be balanced. And it will not raise taxes on Ohioans. (The Governor then described a wide range of measures used to balance the budget and enhance revenues). (A centerpiece of the address was the Governor’s) plan to build our education system anew. The plan is based on a very simple premise: we should design our education system around what works. I have embraced an evidence-based education approach that harnesses research results and applies those findings to Ohio’s specific circumstances. . . . The elements of my plan are supported by evidence, and that evidence will guide our implementation of the plan over the next eight years. . . . (Five components covered in considerable detail are summarized as follows): FIRST, what we teach and how we teach will prepare Ohioans to thrive in the 21st Century. . . The Ohio Department of Education will set standards for Ohio schools requiring innovative teaching formats. Interdisciplinary methods, project-based learning, real world lessons, and service learning will be the norm.. . . . SECOND, under my plan, we will expand learning opportunities. . . Over a ten-year period we will add 20 instructional days to the school calendar. . . . Ohio will now require universal all-day kindergarten. . .. We will provide resources to expand the learning day for all students (community service, tutoring and wellness programs). . . . We will build on our ‘Closing the Achievement Gap’ initiative (and) create community engagement teams in schools. . . . We will celebrate learning with new academic achievement competitions and awards. . . . THIRD, under my plan, we will improve educator quality (revolutionize teacher preparation and development; initiate a career ladder that begins with residency and can build up to lead teacher). . . . Under my plan, we will give administrators the power to dismiss teachers for good cause, the same standard applied to other public employees. . . . We will create a Teach Ohio program (alternate certification). . . . Our university teacher education programs will be redesigned. . . . We will strengthen our licensing standards for school principals. . . . FOURTH, under my plan, we will measure ourselves against the world. . . . We will . . . replace the Ohio Graduation Test with the ACT and three additional measures. . . . All students will take the ACT college entrance examination, not only to measure their high school achievement, but to help raise students’ aspirations for higher education. Students will also take statewide ‘end of course’ exams, complete a service learning project, and submit a senior project. . . . In grades 3 through 8, our assessments will also be entirely rewritten to test for mastery of the information and skills in the curriculum. . . . FIFTH, under my plan, we will establish an unprecedented level of school district accountability and transparency. . . . School districts will undergo performance audits overseen by the Department of Education. . . . Districts will report their spending plans before each school year and then account for every dollar at the conclusion of the school year. . . . We will provide parents, public officials, and taxpayers an annual fiscal and operational report card for every school district. . . . My plan lowers what our local taxpayers are expected to contribute to local schools from 23 mills to 20 mills. The State will assume responsibility for providing the difference between what those 20 mills raise and the cost of the full range of educational resources our students need according to our evidence-based approach.” (Note: The plan is said to cost $3.5 billion over eight years.) *** Office of Budget and Management, February 2, 2009: On February 2, Governor Strickland presented the “Executive Budget totaling $120.2 billion for fiscal years 2010 and 2011. . . . General Revenue Fund tax receipts are projected to decline by $825.8 million from FY 2009 to FY 2010 (4.5 percent) and then increase by $59.2 million in FY 2011. The Executive Budget assumes the use of $3.4 billion from the Federal stimulus package in order to balance the General Revenue Fund and avoid additional funding reductions. For the biennium, total growth in the budget is 4.4 percent. . . . This budget continues the momentum in key investments that are critical to rebuilding Ohio’s economy and positioning it for recovery; (a) reforming Ohio’s primary and secondary education system; . . . (b) creating anew Ohio’s education finance system; . . . (c) increasing affordability through sustained tuition limits for the University System of Ohio; (d) implementing a Unified Long-Term Care Budget; . . . (e) providing access to health care for every Ohio child; (f) expanding access to health care for over 111,000 uninsured Ohioans; (g) advancing an accountability and efficiency agenda to lower the cost of government; (h) fully implementing tax reforms enacted in Amended Substitute House Bill 66; and (i) proposing new and better tools to get and keep good jobs.” *** Office of Budget and Management, April 10, 2009: This report contains information regarding Ohio’s financial position through March 31, 2009, as well as highlights of regional and national economic indicators. . . . The U.S. unemployment rate increased by 0.4 points in March to 8.5% -- the highest since October 1983. The Ohio unemployment rate increased to 9.4% in February -- the highest since May 1984. . . . The deterioration of the U.S. economy over the first quarter of calendar year 2009 outpaces the most pessimistic economic forecasts issued only months ago -- forecasts that moved the U.S. and Ohio indicators to depths unseen in recent downturns. This is reflected in the pattern of underperformance shown in Ohio’s tax receipts over the past four months. Ohio’s March tax receipts of $1,200 million were $60.4 million below the December revised revenue estimates.” *** Office of the Governor, April 10, 2009: Governor Strickland released “a statement in response to the report published today by the creators of the evidence-based school funding model, education researchers Lawrence Picus and Allan Odden. The analysis, commissioned by the KnowledgeWorks Foundation, validates the governor’s research-based proposal to establish a constitutional system of education in Ohio. Also today, the Governor’s Office released a condensed bibliography of research materials used in crafting his education reform and funding plan, sorted for easier readability and accessibility.” The bibliography is included with this statement. *** Office of the Ohio Auditor of State, April 16, 2009: “State Auditor Mary Taylor today urged caution as legislative leaders deliberate Ohio’s next two-year budget, to take effect in July. Taylor said that, based on projections released by the her office today, the proposed State budget for fiscal years 2010 and 2011 is not sustainable and, if unchanged, will leave Ohio with a $7.9 billion shortfall by 2013. . . . Taylor said she and many Ohioans are deeply concerned with the proposed State budget for fiscal years 2010 and 2011. To address a projected $7.3 billion shortfall in those years, the proposal uses a significant amount of federal and State one-time funding to bridge the gap. ‘We cannot continue to push our problems off until tomorrow, because the huge shortfall we project for 2012 and 2013 won’t go away by simply ignoring it,’ Taylor said.” *** Office of the Governor, April 16, 2009: Ohio Governor Ted Strickland released a statement in response to Auditor Mary Taylor’s comments on the State budget and use of federal stimulus resources (as reported in the above April 16 item). In part, the Governor stated that “auditor Mary Taylor appears to be advocating for tax increases or severe service cuts at a time when too many Ohioans are struggling to make ends meet. I continue to believe that increasing taxes on Ohioans during this national economic downturn would deepen the effects of the recession in Ohio and hurt, rather than help, Ohio families striving to emerge from this recession. . . . I fully intend to make use of every federal stimulus dollar available to Ohio. Even so, we have crafted a budget that makes deep cuts in many State agencies to ensure the State’s long-term sustainability. Current State employees are preparing to take 10 unpaid furlough days. And, the State workforce has more than 3,000 fewer employees today than when I took office two years ago.” *** Ohio Department of Job and Family Services, April 17, 2009: “Ohio's unemployment rate was 9.7 percent in March, up from the revised rate of 9.5 percent in February, according to data released this morning by the Ohio Department of Job and Family Services. Ohio's nonfarm wage and salary employment decreased 37,500 over the month, from 5,194,700 in February, to 5,157,200 in March. . . . The U.S. unemployment rate for March was 8.5 percent, up from 8.1 percent in February.” *** Columbus Dispatch, May 5, 2009: Officials announced to today that “Ohio is facing a possible budget shortfall of at least $600 million and possibly more than $900 million in the current State budget, thanks to the ongoing recession and anemic income-tax filings this spring, officials announced today. . . . Those cuts would come after three rounds of budget cuts and accounting adjustments last year totaling $1.9 billion. Even after that, the State has continued to see revenues fall short of estimates that were revised just before Christmas. . . . State Senator Jon Husted (R-Kettering) said the administration has a duty to tell the Senate immediately if it plans to drain the $942 million rainy day fund to plug the latest budget hole, so that the Senate doesn't include that money in its 2010-11 budget.” *** Cincinnati Enquirer, June 11, 2009: “Gov. Ted Strickland's budget director said Thursday State revenues might plunge as much as $3.2 billion below estimates included in the proposed two-year budget, meaning state legislators must make new, deep spending cuts this month. Falling State tax receipts alone account for $2.3 billion of the projected budget gap, Budget Director Pari Sabety told legislators. .. . . Both the Republicans, who control the Senate, and Democrats, who control the House, say they are against a tax increase, leaving few options to close a widening gap in the proposed $54 billion budget, other than making major cuts, including public services and staff. . . . In December, Sabety and Strickland projected budget deficits of $5 billion to $7 billion over the next two years -- but that was before the federal government approved sending about $8 billion in federal stimulus money to Ohio.” NOTE: The special session of the General Assembly is scheduled to begin on June 15. _________________________________ Governor Orders $540 Million in Adjustments to Preserve Ohio’s Balanced Budget, Office of the Governor, September 10, 2003: http://www.governor.ohio.gov/News/PressReleases/2008/September2008/News91008/
Oklahoma: Better Off Than Some States, Despite Declining Revenue Forecasts + A New Graduation Coaches Program Compiled from several sources named in the text and in the links below.
*** Office of the Governor, April 4, 2008: Governor Brad Henry today approved $11.5 million in emergency funding for Oklahoma public schools, but added that K-12 education will need additional supplemental funding to help address a funding shortfall this fiscal year. . . . The governor and State lawmakers are trying to fill a revenue shortfall in the House Bill 1017 fund, an account that supplements the K-12 schools’ budget.” *** Office of the Governor, April 29, 2008: “Gov. Brad Henry today signed HB 2276, a nearly $7.1 billion general appropriations bill that provides a standstill budget for the State of Oklahoma. Despite facing declining revenues, the governor and state lawmakers were able to balance the budget without tapping the state’s Rainy Day Fund.” *** Office of the Governor, October 9, 2008: “Citing ongoing turmoil in the international and national financial markets, Governor Brad Henry today named a key lieutenant, State Treasurer Scott Meacham, to conduct a review of Oklahoma interests to help protect the State during the ongoing economic downturn. In announcing the action at a State Capitol news conference, Governor Henry stressed that Oklahoma’s financial institutions and economy are in much better shape than their counterparts around the country, but he added that the State must be prepared to respond as economic conditions change. . . . In recent days, the ongoing economic crisis has impacted at least two State interests: pension systems and pending bond issues. Like any entities with significant Wall Street investments, Oklahoma retirement systems have suffered losses as the stock market has declined. The financial instability has also made it more difficult to sell State bonds to finance pending bond issues for a variety of capital improvement projects.” *** NewsOK, The Oklahoman, December 20, 2008: “A drop in energy prices and tax collections means lawmakers will have $309.6 million less when drafting next year’s State budget. In figures released Friday (December 19) by the Office of State Finance, the State will go to a budget of $6.8 billion, down from this year’s budget of $7.1 billion. . . . Figures released Friday also show projections for the current budget year, which ends June 30, are expected to drop. Officials estimate the general revenue fund will be down by about $43.7 million compared to earlier forecasts. That accounts for less than 1 percent and is below the 5 percent cushion built into the budget. . . . Gov. Brad Henry will use the data to draft his budget. The projections will be revised in February. Lawmakers will then set agency budgets.” *** Office of the Governor, February 2, 2009: In his State of the State Address, Governor Henry said that “this year, we face a budget hole of nearly $600 million. . . . Today, I have placed before you a balanced budget that makes precise, surgical cuts while protecting vital State functions such as education, healthcare, transportation and public safety. . . . Perhaps the most important key to future prosperity is a strong education system. . . . I again propose a ‘graduation coaches’ program that will bring volunteers from our communities into our schools to serve as guides, mentors and champions for students at risk of dropping out. . . . We took action in 2004, and our nationally-acclaimed ‘Insure Oklahoma’ program has since demonstrated great promise. More than 3,600 employers are partnering with the State and private insurers to provide coverage to nearly 11,000 employees. But that is only a start. . . . I commend House leaders for their efforts to increase the number of autism service providers in Oklahoma. Too many of our families face the daunting task of raising autistic children with little or no help.” *** Office of State Finance, February 2, 2009: On February 2, Governor Henry submitted his FY 2010 executive budget for the Legislature’s consideration. The governor said that “it is necessary to make precise surgical cuts in many State agencies while protecting core functions of government such as education, health care, transportation, and public safety.” The governor urged a permanent funding mechanism for the EDGE Research Endowment (for high-tech businesses and jobs) and included improvements in government efficiency in such areas as purchasing and information technology. In EDUCATION, accompanying charts show proposed reductions from FY 2009 amounts in the Arts Council (-8.1%); Educational TV authorization (-40.0%); Department of Libraries (-5.1%); higher education (-0.1%); School of Science and Math (less than 0.1%); Commission for Teacher Preparation (-3.3%). Considering all education areas, the total proposal is an increase of 0.9%. In HUMAN SERVICES, proposed reductions are shown for Children and Youth Commission (-5.2%); Office of Disability Concerns (-2.3%); Department of Human Services (-0.1 %); Indian Affairs Commission (-5.4%); J. D. McCarty Center (-5.2%); Juvenile Affairs (less than 0.1%); Physician Manpower Training (-5.0%); Department of Rehabilitation Services (-3.8%). Overall, the proposal for Human Services increases funding by 0.3%. An increase of 0.2% is proposed for Health. *** News OK/The Oklahoman, Oklahoma City, February 17, 2009: “ (On February 17) The State Board of Equalization . . . certified that legislators would have about $6.4 billion to appropriate for the 2010 fiscal year, which starts July 1. Legislators last year had about $7.1 billion. . . . (Actually, however) the budget hole is closer to $900 million because State officials last year used one-time and carryover money to balance this fiscal year's budget. Declining federal money coming into the State, mostly for Oklahoma’s Medicaid program, also contributes to the budget hole Some of that shortfall should be whittled down because the State has about $250 million in cash reserves and other money on hand.. Governor Brad Henry is proposing agencies cut travel expenses and reduce energy expenses by 10 percent by next year. He also is suggesting changes in how the state buys goods and handles its Internet services which could result in $45 million in savings.” Meanwhile, Oklahoma is analyzing the federal stimulus requirements.” *** NewsOK/The Oklahoman, Oklahoma City, April 5, 2009:Federal stimulus money could take care of more than half of the state’s $900 million budget hole, a key budget negotiator says. Of the $2.6 billion in federal money earmarked for Oklahoma over the next two years, indications are that about $500 million can be used for budget stabilization and programs for the 2010 fiscal year, said State Rep. Ken Miller, chairman of the House Appropriations and Budget Committee. House Speaker Chris Benge said work on crafting the State’s budget is in its infancy.” *** Office of the Governor, April 25, 2009: “Gov. Brad Henry has signed into law a program that aims to increase graduation rates across Oklahoma. The graduation coaches program, outlined in House Bill 1050 by Rep. John Carey (D-Durant) and Sen. John Sparks (D-Norman), was proposed by Gov. Henry in his 2008 and 2009 State of the State addresses. . . . The graduation coaches program will recruit volunteers from the community to mentor at-risk students, keeping them academically on-track and helping them cope with difficulties outside of school that could become a barrier to a high school diploma.” *** Office of the Governor, May 29, 2009: In this announcement, the Governor stated that “legislators faced difficult decisions this year and many agencies had to receive painful budget cuts. Despite the challenges, State leaders in the House and Senate, working with my office, were able to craft a bipartisan, balanced budget which preserves vital State services like education, health care and transportation. In crafting that budget, we were also careful to protect the state’s Rainy Day Fund. . . . The graduation coaches program I championed in the State of the State speech was approved by the Legislature. . . . Lawmakers also passed a measure that will expand eligibility for the Insure Oklahoma program. An innovative, nationally recognized public-private partnership, Insure Oklahoma helps small businesses provide health coverage to their employees.” (NOTE: As approved by the Legislature on May 22, the total general appropriations bill for the fiscal year that begins July 1 is $7.231 billion.) _________________________________ Gov. Henry Approves Emergency Education Funds, Office of the Governor, April 4, 2008: http://www.ok.gov/governor/display_article.php?article_id=1072&article_type=1 Governor Henry Signs Budget, Office of the Governor, April 29, 2008: http://www.ok.gov/governor/display_article.php?article_id=1083&article_type=1 Gov. Henry Names Treasurer Meacham to Conduct State Financial Review, Office of the Governor, October 9, 2008: http://www.governor.state.ok.us/display_article.php?article_id=1147&article_type=1 Clearer Picture Emerges for Leaner Oklahoma State Budget, NewsOK, The Oklahoman, December 20, 2008: http://newsok.com/clearer-picture-emerges-for-leaner-oklahoma-state-budget/article/3331688 State of the State Address, Office of the Governor, February 2, 2009: http://www.governor.state.ok.us/stateofthestate2009.php FY-2010 Executive Budget, Oklahoma Office of State Finance, February 2, 2009 -- Click for details: http://www.ok.gov/OSF/Budget/index.html Oklahoma’s Budget Hole Close to $900 Million, NewsOK/The Oklahoman, Oklahoma City, February 17, 2009: http://newsok.com/oklahomas-budget-hole-close-to-900-million/article/3346531 *** The State Board of Equalization’s itemized proposed FY 2010 revenue certification is at this link (source of data for the above article in The Oklahoman):: http://www.ok.gov/OSF/documents/boe02172009.pdf The Oklahoma Recovery & Investment website, announced in March 2009, is at: http://www.ok.gov/recovery/ Stimulus May Cover Half of Oklahoma’s Shortfall, NewsOK/The Oklahoman, Oklahoma City, April 5, 2009: http://newsok.com/stimulus-may-cover-half-of-oklahomas-shortfall/article/3359034 Gov. Henry Signs Graduation Coaches Program Into Law, Office of the Governor, April 25, 2009: http://www.governor.state.ok.us/display_article.php?article_id=1237&article_type=1 Legislative Session Complete, Office of the Governor, May 29, 2009: http://www.governor.state.ok.us/display_article.php?article_id=1261&article_type *** A fact sheet and review of the FY 2010 budget, prepared by the Oklahoma Policy Institute, is available at: http://www.okpolicy.org/fy-10-budget-information
Oregon: Deficit Expands: Start-up of New Graduation Requirements in Doubt Compiled from several sources named in the text and in the links below.
*** The Oregonian (Portland) November 14, 2008: “Gov. Ted Kulongoski said Friday (November 14) that he wants to delay Oregon's new graduation requirements, giving a pass to this year's high school freshmen, who are supposed to prove their skills in reading, math, speaking and writing to get a diploma. . . . The more rigorous requirements were enacted by a unanimous Oregon Board of Education in June after nearly three years of study.. . . But Kulongoski, citing the sharp economic downturn, told hundreds of local school board members Friday that he doesn't think he will be able to find millions of dollars to hire more teachers and upgrade schools to get students to higher standards. So he will push the State Board to delay the higher graduation requirements rather than give schools what he called an ‘unfunded mandate.’" ***The Oregonian, November 19, 2008: “State lawmakers expected a budget shock at Wednesday's (November 19) quarterly economic forecast and they got it: Projections show they will have $946 million less to spend on everything from schools to prisons than they thought only three months ago. State economists reported that a steep drop in personal income tax revenue and a smaller drop in lottery profits have punched a $184 million hole in the State's budget forecast, forcing it to make up a $142 million shortfall after taking into account some contingency funds. That prompted Gov. Ted Kulongoski to order agencies to cut what's left of their 2007-09 budgets by about 5 percent between now and June. The news for the upcoming two years is much worse. Revenues are projected to be down by $762 million compared with the September forecast. . . . Overall, the State's general fund budget will still grow over the next two years but not by as much as officials had been expecting.” *** Office of the Governor, December 1, 2008: “Governor Kulongoski today delivered his recommended budget for 2009-2011 to the State legislature. . . . The 15.8 billion dollar budget makes strategic investments in education, health care, climate change, and job creation through transportation and other infrastructure projects. . . . The Governor’s budget is built upon the principle of prioritizing the State’s limited resources in investments that will address the fundamental issues facing us and better position Oregon for long-term economic success when the recession passes. The Governor’s budget focuses on four key areas: (a) education, pre-K through post-secondary; (b) health care, starting with children; (c) climate change; and (d) transportation, creating jobs immediately and for the long-term. . . . Due to uncertainty about the course of the present economic crisis, the Governor’s budget preserves education funding at every level for the first year of the biennium, leaving the need for an additional $225 million in the second half of the biennium to keep education at full funding across the board.” (The State Legislature will meet in January 2009.) *** Office of the Governor, January 12, 2009: “Governor Kulongoski today delivered his annual State of the State address to a joint session of the 75th Legislative Assembly on the opening day of the 2009 legislative session. . . The Governor released his recommended budget to the Legislature on December 1, 2008, which he pointed out has already changed in the last month because of shifting economic trends nationally and across the State. . . . The Governor reiterated his commitment to protecting EDUCATION, particularly during the economic downturn, as it is the foundation to a strong economic recovery and job creation and readiness. . . . On HEALTH CARE, the Governor called on the Legislature to put children ahead of politics to raise the necessary revenue to access one-billion federal dollars that will enable the State to provide access to affordable health insurance to the 116,000 uninsured kids in Oregon.” The Governor also discussed proposals for renewable energy and green technology, and a plan that invests in transportation (roads, bridges, public transit, rail lines, airports, seaports) and creates thousands of family wage jobs.” *** Portland Business Journal, January 23, 2009: “The Oregon Supreme Court has largely rejected a suit demanding that the Legislature substantially increase K-12 school funding. In a ruling today (January 23), the State Supreme Court largely affirmed a lower court ruling in Pendleton School District v. State of Oregon, a much-watched suit brought on behalf of 18 school districts and seven students. The suit alleged the State is in violation of a 2000 voter-approved ballot measure that requires the Legislature to fund schools at ‘a level sufficient to meet certain quality educational goals established by law.’” *** Office of the Governor, February 19, 2009: “ Governor Kulongoski said that “effective March 1, 2009, as Governor I will take a 5-percent reduction in pay. The money from this reduction will be given as a direct payment to the Common School Fund. . . . As to State management employees -– not the union-represented workforce –- all salary step increases will be frozen effective March 1, 2009. The additional salary step implemented for management employees last July will be suspended through June 2011. . . . I am also announcing that effective March 1, 2009, my office and other State managers will be asked to take furlough days – ranging from one to four days over the next four months” (depending on salary level). . . . These measures are in addition to steps that State agencies have been implementing over the last 6 months – from reducing out of state travel, to not filling hundreds of vacant positions, to cutting administrative costs. . . . That said, my goal today is to avoid layoffs whenever possible. . . . I need everyone to understand that this federal assistance (the stimulus package) will not (and I repeat, will not) solve our budget shortfall. It will help by reducing some of the cuts to essential government programs. But the money is simply not enough to prevent reductions to important services.” *** KGW News Channel 8, Portland, February 20, 2009: “State Economist Tom Potiowsky says the Oregon budget deficit has grown to $850 million for the current biennium and will reach nearly $3 billion for 2009-11, forcing even deeper cuts than anticipated. . . . In a quarterly forecast to the Oregon Legislature on Friday, Potiowsky predicted a decline of about $100 million more for the current biennium than his preliminary forecast last month.” *** The Oregonian, Portland, April 3, 2009: “You might call it the doomsday list for Oregon State government: a dry but gasp-inducing stack of lists released Friday of how state agencies would cut 30 percent to fill the $4.4 billion budget gap Oregon faces. In truth, lawmakers won't have to chop spending by 30 percent unless the economy continues to worsen. Legislative budget leaders say they can fill about half the predicted shortfall with federal economic stimulus money and State rainy-day funds. But the budget leaders, Sen. Margaret Carter, D-Portland, and Rep. Peter Buckley, D-Ashland, say some of these cuts could become reality as they try to pick and choose among an array of tough options. The release of State agency cut lists also allows advocates for government programs to step up their efforts to push for tax increases to head off major cuts.” *** Office of the Governor, April 21, 2009: “Governor Ted Kulongoski today signed into law Senate Bill 462, legislation that will allow 6,000 more unemployed Oregonians to qualify for unemployment benefits. . . . The law also allows Oregon to receive $85 million dollars in federal funds from the Unemployment Insurance Modernization Act under the American Recovery and Reinvestment Act of 2009 to further enhance the State unemployment insurance system.” *** Office of the Governor, April 28, 2009: “Oregon is receiving $382 million today per the State's successful completion of Part 1 of the State Stabilization Application (ARRA), which was made available April 1. Eighty-two percent of these funds are to be distributed to public elementary, secondary, and higher education institutions, with the remaining 18 percent to be available for education, school modernization, public safety, or other government services. Oregon will be eligible to apply for another $188 million in state stabilization funds early this fall. . . . Governor Kulongoski and the Oregon Legislature have designated $171 million of this first round of funding for K-12 schools districts and post secondary education in the current 2007-09 biennium. This first installment is designed to provide immediate financial support to schools as a result of recent cuts to K-12 and other education funding and will help school districts avoid closing early this school year. . . . With the nearly $400 million in federal recovery dollars already appropriated by the Governor and Legislature and for education and human services to help balance the budget for the 2007-09 fiscal year, that leaves approximately $900 million for use for the first half of the biennium – 2009-2010 – and another $900 million for the second half of the biennium – 2010-2011.” *** Oregon Office of Economic Analysis, May 15, 2009: In it’s May 2009 quarterly report, this office stated that “the first quarter of 2009 marks the fifth consecutive quarter of job losses. The annualized drop of 8.2 percent is the largest quarterly employment decline since the second quarter of 1980. The year-over-year (Y/Y) employment decline for the first quarter is 4.5 percent. Two quarters ago, the Y/Y employment decline was only 0.4 percent. The job loss descent has been extremely rapid in the past two quarters. . . . The unemployment rate for March 2009 reached 12.1 percent. . . . The forecast for General Fund revenues for the 2007-2009 biennium is $11,757.9 million, a decrease of $260.6 million from the March 2008 forecast. . . . After adjustments for several new laws related to expenditure cuts and revenue increases, the May projections result in a negative ending balance of $351.3 million for the 2007-2009 biennium. . . . The forecast for total General Fund revenue during 2009-2011 was reduced by $532.5 million relative to March.” *** Portland Business Journal, June 11, 2009: “The number of Oregon properties with foreclosure filings jumped 89.8 percent since May 2008, giving Oregon the 12th-highest foreclosure rate in the country, according to new data from RealtyTrac. . . . The RealtyTrac U.S. Foreclosure Market Report provides the total number of properties with at least one foreclosure filing reported during the month.” *** Portland Tribune, June 11, 2009: “The Senate approved Thursday (June 10) House Bill 3405, which would raise the minimum tax corporations pay and put an estimated $261 million into the 2009-11 budget, and House Bill 2649, which creates a new tax bracket for people earning more than $250,000.” *** Office of the Governor, June 11, 2009: “Today the Senate passed House Bill 2116 and House Bill 2009, which represent the largest expansion of health care coverage and the most significant steps forward to controlling health costs since the enactment of the Oregon Health Plan two decades ago.” _________________________________ Governor, Citing Economy, Urges Delay of New Oregon Graduation Requirements, The Oregonian, Portland, November 14, 2008: http://www.oregonlive.com/news/index.ssf/2008/11/governor_delay_higher_diploma.html Recession Slices Nearly $1 Billion From Oregon Budget, the Oregonian, Portland, November 19, 2008: http://www.oregonlive.com/news/index.ssf/2008/11/recession_slices_1_billion_fro.html Governor Delivers 2009-2011 Recommended Budget to the Legislature, Office of the Governor, December 1, 2008: http://www.governor.state.or.us/Gov/P2008/press_120108.shtml For details on the Governor’s December 1 budget proposal, see: http://www.oregon.gov/DAS/BAM/GRB0911intro.shtml Governor Delivers State of the State Address to 75th Legislature, Office of the Governor, January 12, 2009 -- Click at the end of the page for full text: http://governor.oregon.gov/Gov/P2009/press_011209.shtml Oregon Supreme Court Rejects School Funding Case, Portland Business Journal, January 23, 2009: http://www.bizjournals.com/portland/stories/2009/01/19/daily67.html Budget Blueprint Rollout Press Conference, Office of the Governor, February 19, 2009: http://governor.oregon.gov/Gov/speech/2009_0219_budget_blueprint_rollout.shtml Latest Oregon Budget Forecast Worse Than Expected, KGW News Channel 8, Portland, February 20, 2009: http://www.kgw.com/business/stories/kgw_022009_business_revenue_forecast.35399b36.html *** To see the March 2009 Revenue Forecast, released on February 20 by Oregon Office of Economic Analysis: http://www.oregon.gov/DAS/OEA/docs/economic/forecast0309.pdf *** Or see the press packet issued by the Office of Economic Analysis: http://www.oregon.gov/DAS/OEA/docs/economic/Press0309.pdf Economic Stimulus and Recovery, “The Oregon Way,” the Governor’s website on the use of ARRA funds, launched in March 2009: http://www.oregon.gov/recovery/ Oregon Budget-Cut List Trips Alarms, The Oregonian, Portland, April 3, 2009: http://www.oregonlive.com/politics/index.ssf/2009/04/oregon_budgetcut_list_trips_al.html *** The agency lists of proposed cuts are available from the Legislative Fiscal Office -- Scroll down at: http://www.leg.state.or.us/budget/home.htm Governor Kulongoski Signs Bill Expanding Access to Unemployment Benefits, Office of the Governor, April 21, 2009; http://governor.oregon.gov/Gov/P2009/press_042109.shtml *** Unemployment insurance reports from the Oregon Employment Department are available at: http://www.oregon.gov/EMPLOY/BUDGET/BUD/index.shtml Oregon Receives $382 Million for Schools and Government Services Through ARRA, Office of the Governor, April 28, 2009: http://governor.oregon.gov/Gov/P2009/press_042809a.shtml Oregon Economic and Revenue Forecast, Oregon Office of Economic Analysis, May 15, 2009: http://www.oregon.gov/DAS/OEA/economic.shtml Foreclosures Jump Nearly 90 Percent in Oregon, Portland Business Journal, June 11, 2009: http://portland.bizjournals.com/portland/stories/2009/06/08/daily49.html?surround=lfn Senate Adopts Two Tax Increase Proposals, Portland Tribune, June 11, 2009: http://www.portlandtribune.com/news/story.php?story_id=124468209130370300 Statement of Governor Kulongoski on Senate Passage of Healthy Kids-Healthy Oregon, Office of the Governor, June 11, 2009: http://governor.oregon.gov/Gov/P2009/press_061109b.shtml
Pennsylvania: A Firm Footing in 2008 Is Less Firm in 2009 Compiled from several sources named in the text and in the links below.
*** Office of the Governor, July 8, 2008: Governor Edward G. Rendell today “signed Pennsylvania’s new, $9.7 billion education budget. . . . The Governor said the education budget will lay the foundation for academic success for all students by providing the largest increase in basic education funding in at least two decades, while also introducing a needs-based school funding formula that invests in proven programs that reap results for children. The spending plan also means further relief to property owners because it increases the State’s share of school funding and lessens school districts’ reliance on property taxes as a revenue source. . . . The budget includes an additional $347 million in Pre-K-12 and higher education funding, a 3 percent increase from last year. . . . It increases funding for basic education by $274 million, or 5.5 percent, while also continuing to fund successful initiatives that are benefiting children from early childhood through graduation.” *** Office of the Governor, October 30, 2008: “With revenues for the current fiscal year coming in below expectations, last month the Governor directed his cabinet secretaries to cut 4.25 percent of their enacted budgets. Agencies that provide public safety, health and education services were given smaller percentage targets to meet. As part of his call for fiscal restraint, the Governor also announced a general hiring freeze and bans on out-of-state travel and on the purchase of new vehicles for the state fleet. The funds from all cost-saving measures will be put into budgetary reserve. . . . The $289 million in cuts identified by agencies under the Governor’s jurisdiction, combined with a $22 million cut the Pennsylvania State System of Higher Education and a $457,000 cut from Thaddeus Stevens College of Technology, comes to $311 million. . . . An additional $39 million in savings would be realized if the General Assembly and other independent State entities agree to make 4.25 percent cuts in their budgets. . . . Pennsylvania’s economy remains on a firmer footing than the economies of other States, according to a report released in mid-October by the national Center on Budget & Policy Priorities.” *** Office of the Governor, December 9, 2008: “Governor Edward G. Rendell today provided a mid-year budget review outlining a plan to address the General Fund shortfall that is projected for the remainder of the 2008-2009 fiscal year. ‘Based on revenue collections through November and current economic forecasts, we are projecting that revenue at the end of the current fiscal year will be below estimate by $1.6 billion,’ the Governor said. . . . Governor Rendell is proposing to close the projected $1.6 billion deficit for the fiscal year ending June 30 without any new taxes. The Governor’s plan includes the following: (a) $464 million from the already announced budget cuts and other cost-saving measures, including a wage freeze for more than 13,600 non-union employees and the elimination of this year’s cost-of-living adjustment for the Governor and Cabinet members, a hiring freeze, and the curtailment of out-of-state travel; (b) $36 million in budget cuts by the General Assembly and other independent agencies; . . . (c) $375 million from a portion of the Commonwealth’s $750 million Rainy Day Fund – which will safeguard the remaining half of the Rainy Day Fund to meet future economic challenges; (d) $174 million in income from the Marcellus Shale natural gas drilling leases; (e) $450 million in anticipated federal fiscal relief; and (f) $101 million in unused funds left over in state accounts from prior-year budgets.” *** Office of the Governor, December 18, 2008: Governor Edward G. Rendell today said that Pennsylvania continues to feel the effects of the struggling national economy as the State’s nonfarm job count in November dropped 26,000 jobs and the unemployment rate rose to 6.1 percent. . . . Nationally, the unemployment rate in November rose to 6.7 percent. Pennsylvania’s rate has been at or below the national level for 69 of the past 71 months.” *** Office of the Governor, January 8, 2009: “The Governor’s Report on State Performance -- the second of its kind from the Rendell administration -- promotes government transparency by providing details on accomplishments of 34 State agencies in the 2007-2008 fiscal year. . . . EDUCATION: In 2007-08 the Commonwealth established Pre-K Counts, which provides quality half- and full-day pre-kindergarten to 3- and 4-year-olds in more than 800 classrooms, giving them a vital early start to learning. Other investments in education at all levels are also paying off. Education Week ranks Pennsylvania 10th in the nation in education performance and policy.” *** Philadelphia Inquirer, January 25, 2009: “Last month, the governor's office forecast a budget deficit of $1.6 billion for the fiscal year that ends in June. Two weeks ago, the projected deficit had risen to $1.9 billion. A week later, on Thursday (January 22), Rendell revised that figure, saying he now expects the deficit to climb to $2.3 billion, or about 8 percent of the $28.3 billion general-fund budget. . . . With broad tax increases off the table, spending cuts are needed to close a State budget deficit estimated to reach more than $5 billion over the next 18 months.” *** Office of the Governor, February 4, 2009: In his Executive Budget Address for fiscal year 2009-2010, Governor Rendell said that “the FY 2009-2010 budget presents challenges the likes of which Pennsylvania and the nation have not seen since the Great Depression. . . . We face a current projected budget deficit of $2.3 billion as a direct result of the national economic recession. . . . While (the proposed) budget does not rely on any broad-based tax increases, it does require targeted revenue increases (tax on smokeless tobacco; a tax on natural gas extraction on the Marcellus Shale). . . . To help close our deficit this year and next year, we will need to tap some of our Rainy Day reserves (leaving $125 million in the fund). . . . The FY 2009-2010 budget cuts or eliminates funding across 89 percent of the line items in the budget. . . . In addition to the elimination of 101 lines, we have proposed reductions in 346 other budget lines. . . . Another 54 expenditure lines do not increase at all. . . . For every position where I can impose a wage freeze, I have stopped salary increases for this year and next. . . . There is nothing sacrosanct about the need to maintain 500 separate school districts across the State. . . . . I am proposing in the FY 2009-10 budget that we establish funds for creation of a legislative commission . . . to develop a plan that includes no more than 100 local districts statewide. . . . The FY 2009-2010 budget (also) includes a provision known as the Pennsylvania Tuition Relief Act, which will provide critically needed college tuition assistance to Pennsylvania families earning less than $100,000 a year (to be paid for by legalizing video poker and taxing its proceeds.).” The Governor applauded the federal plan for a stimulus package but warned that it would not provide an easy way to balance the FY 2009-10 budget. *** Philadelphia Inquirer, February 5, 2009: This article provides details on the Governor’s proposed 2009-2010 budget. The Governor outlined a "tuition relief program that he said would enable 20,000 more students to attend State and community colleges. The governor proposed the creation of a 12-member commission to develop a plan to consolidate school districts from 500 to no more than 100 to save taxpayer money. If the legislature does not approve the commission's proposals, the governor said, the Department of Education should be given the power to order the consolidations. Rendell wants to increase Pennsylvania's public school funding by $265.3 million, to a total of $9.9 billion, a 2.8 percent increase over last year's budget. . . . State special-education funding would remain flat this year; reimbursements for charter school costs, transportation funding and pre-kindergarten funding would increase. . . . Rendell also proposed axing the Governor's Schools of Excellence, popular weeklong summer programs for gifted students statewide. . . . . Also, two state-run schools would be closed -- the Scranton State School for the Deaf and the Scotland School, initially opened after the Civil War to educate veterans' children. . . . Rendell's budget also would eliminate funding for a State technology initiative, some science and math education programs, and some job-training and ethnic-heritage programs.” *** The Daily Collegian, Penn State University, February 5, 2009: “Gov. Ed Rendell released his budget recommendations for the 2009-2010 fiscal year Wednesday (February 4), announcing his intention to decrease Penn State's allotment of State money by $20.3 million. The Governor's recommendation is for the university to receive $318.1 million in State money, a 6-percent drop from the 2008-09 budget. Overall, Pennsylvania's four state-related universities will see a 6 percent cut in funding for the upcoming fiscal year.” *** Pennsylvania Department of Revenue, March 2, 2009: “Acting Secretary of Revenue Stephen H. Stetler today reported that Pennsylvania collected $1.5 billion in General Fund revenue in February, $196.8 million, or 11.6 percent, less than anticipated. Fiscal year-to-date General Fund collections total $14.8 billion, which is $1.3 billion, or 7.9 percent, below estimate.” *** Office of the Governor, April 2, 2009: “Governor Edward G. Rendell today said his administration has reached a tentative agreement with some of the State’s largest employees’ unions that eliminates the immediate need for rolling furloughs of employees in those unions to help close the state’s budget gap. The agreement to temporarily reduce the Commonwealth’s health care benefit contribution rate by 20 percent will generate up to $200 million in savings over the next 15 months. The agreement also assures no changes in health care benefits for employees that are members of participating unions. ‘This agreement is truly a win-win for employees and the state,’ said Governor Rendell. ‘The temporary reduction in our health care contribution rate will provide us with enough savings to eliminate the immediate need to consider rolling furloughs for participating unions. This ensures that State government will keep running at the same pace for the people of Pennsylvania.’ . . . The commonwealth is committed to paying back the fund in monthly installments starting as early as September 2010. . . . The Governor has issued a pay freeze for all managers and non-represented employees, including the elimination of two step increments and a general pay increase scheduled to take effect between January 2009 and January 2010, a measure projected to save nearly $140 million through fiscal year 2010/11.” *** Pennsylvania Department of Revenue, April 3, 2009: “The Secretary of Revenue reported that Pennsylvania collected $3.9 billion in General Fund revenue during March -- $334.6 million, or 7.9 percent, less than anticipated. Fiscal year-to-date General Fund collections total $18.7 billion, which is $1.6 billion, or 7.9 percent, below estimate.” *** Office of the Governor, April 20, 2009: “Unemployed workers and youth seeking summer jobs will get a boost from approximately $74 million from the American Recovery and Reinvestment Act, Governor Edward G. Rendell said today. . . . The funds, which are awarded to local workforce investment areas, will provide job training and education services for unemployed workers and young people between 14 and 24 seeking summer employment. . . . Federal guidance for ARRA job training funds also helps expand summer youth employment by providing wage support for at-risk youth.” *** Office of the Governor, April 22, 2009: “Governor Edward G. Rendell’s plan to make college tuition more affordable for every Pennsylvania family earning under $100,000 a year will help more than 170,000 students once in place, while putting a college degree within reach of 10,000 students who otherwise would be unable to afford tuition or might leave the state to attend college. . . . Under the Pennsylvania Tuition Relief Act announced as part of the Governor’s 2009-10 budget proposal, all incoming students who qualify and seek to attend state-owned universities or community colleges will pay what they can afford in accordance with established financial aid practices. Every family will pay at least $1,000 a year for each child in college. For families with income under $100,000, students could obtain as much as $7,600 in relief for tuition, fees, room and board. This relief will greatly enhance the affordability of higher education, Governor Rendell said. . . . The Governor’s budget also includes a $35 million increase in Pennsylvania Higher Education Assistance Agency (PHEAA) tuition grants. This increase will dedicate $10 million to provide grants to nearly 10,000 additional community college students while ensuring that other college and university students do not lose their grants as a result of a reduction in contributions to student grants by PHEAA. . . . If promptly approved by the General Assembly, the plan would start this fall with incoming freshmen.” *** Office of the Governor, May 1, 2009: “Governor Edward G. Rendell today issued the following statement on the State’s latest revenue report that shows April General Fund revenues were $941.5 million (24.2 percent) below estimate; and year-to-date revenues are $2.6 billion (10.5 percent) below estimate. ‘Tax revenues in April are sobering evidence of the harsh effect the national recession has had on Pennsylvania’s workers and businesses. Though Pennsylvania’s Personal Income Tax rate is one of the lowest in the nation, it still accounts for nearly 40 percent of our General Fund revenues, and that category alone was 30 percent below estimate. Among the steps we will take to close the gap, I propose tapping the Rainy Day Fund and the Healthcare Provider Retention Account. . . . We are continuing to closely monitor revenues as we approach the end of the fiscal year. I urge the General Assembly to work together with me to address the challenges caused by the national economic crisis and return the Commonwealth to prosperity.’” *** Philadelphia Inquirer, May 12, 2009: “Every year since taking office, Gov. Rendell has pushed for expanded school funding, including programs for early-childhood education, increases for poorer districts, and more for high school improvements. Republicans fought spending increases and what they saw as an expanded state role in education. For the most part, Rendell prevailed. This year, driven by the recession and budget deficits, the Republicans are sharpening their attack on Rendell's education plan, proposing to roll back almost all his priorities. . . . And the uncertainty about the final budget, which must be adopted by July 1, is making life even more difficult than usual for school boards wary of raising taxes during a recession while local revenue declines.” *** Office of the Governor, June 11, 2009: “Budget Secretary Mary Soderberg today sent a letter to the House and Senate leadership summarizing the effects of the prolonged national recession on the commonwealth budget and urging leaders to work together ‘in a spirit of bipartisan cooperation’ to enact the 2009-10 budget. . . . Soderberg noted that the administration currently estimates the 2008-09 year-end revenue shortfall will be $3.2 billion. In addition, she said, ‘Revenue estimates for 2009-10 also have been revised downward, and we anticipate there will be no growth in 2009-10 revenues over 2008-09.’” _________________________________ Governor Rendell Signs Education Budget Benefiting Children and Taxpayers; Laying Groundwork for Long-Term Funding Adequacy, Office of the Governor -- Click on July 8, 2008: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=2999&PageID=434874&level=2&css=L2&mode=2&cached=true&year=2008&month=6 Governor Rendell Says $350 Million in Cuts Will Keep Budget Balanced, Office of the Governor -- Click on October 30, 2008: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=2999&PageID=434874&level=2&css=L2&mode=2&cached=true&year=2008&month=9 Governor Rendell Outlines Plan to Close Budget Shortfall, Office of the Governor -- Click on December 9, 2008: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=2999&PageID=434874&level=2&css=L2&mode=2&cached=true&year=2008&month=11 Governor Rendell Says National Stimulus Needed to Boost Economy As Unemployment Rises, Office of the Governor -- Click on December 18, 2008: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=2999&PageID=434874&level=2&css=L2&mode=2&cached=true&year=2008&month=11 Governor Rendell Says Latest Performance Report Shows How Taxes Are Spent to Improve Services, Promotes Transparency, Office of the Governor -- Click on January 8, 2009: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=2999&PageID=434874&level=2&css=L2&mode=2&cached=true&year=2009&month=0 Editorial: Raising PA Taxes, Philadelphia Inquirer, January 25, 2009: http://www.philly.com/inquirer/currents/20090125_Editorial__Raising_Pa__Taxes.html Executive Budget Address, Fiscal Year 2009-2010, Office of the Governor, February 4, 2009 -- Click on February 4: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=2999&PageID=434874&level=2&css=L2&mode=2&cached=true&year=2009&month=1 *** To access the 2009-2010 budget proposal, Budget in Brief, and related information: http://www.budget.state.pa.us/portal/server.pt/community/current_and_proposed_commonwealth_budgets/4566 Rendell: Boost School Funding, Consolidate, Philadelphia Inquirer, February 5, 2009: http://www.philly.com/philly/hp/news_update/20090205_Rendell__Boost_school_funding__consolidate.html Rendell Decreases Funds to University, The Daily Collegian, Penn State University, February 5, 2009: http://www.collegian.psu.edu/archive/2009/02/05/rendell_decreases_funds_to_uni.aspx Revenue Department Releases February Collections, Pennsylvania Department of Revenue, March 2, 2009: http://www.revenue.state.pa.us/revenue/CWP/view.asp?Q=291644&A=208 Governor Rendell Announces Agreement to Avoid Immediate Need for Rolling Furloughs -- Tentative Agreement with some Unions Will Reduce Budget Gap, Office of the Governor, April 2, 2009 -- Scroll down and click on the first April 2 item: http://www.portal.state.pa.us/portal/server.pt?open=514&objID=368328&mode=2 Revenue Department Releases March Collections, Pennsylvania Department of Revenue, April 3, 2009: http://www.revenue.state.pa.us/revenue/CWP/view.asp?A=208&Q=292008 Governor Rendell Announces $74 Million in Recovery Funds for Job Training, Youth Employment, Office of the Governor, April 20, 2009 -- Scroll down: http://www.governor.state.pa.us/portal/server.pt?open=512&objID=2999&&PageID=368328&level=2&css=L2&mode=2&in_hi_userid=2&cached=true Governor Rendell’s Tuition Relief Plan Will Make College Affordable for 170,000 Students, Office of the Governor, April 22, 2009 -- Scroll down: http://www.governor.state.pa.us/portal/server.pt?open=512&objID=2999&&PageID=368328&level=2&css=L2&mode=2&in_hi_userid=2&cached=true Governor Rendell Comments on April Revenue, Plan to Close Budget Gap, Office of the Governor, May 1, 2009 -- See News Releases for April: http://www.governor.state.pa.us/portal/server.pt?open=512&objID=2999&&PageID=368328&level=2&css=L2&mode=2&in_hi_userid=2&cached=true *** The Department of Revenue report for April 2009 is available at: http://www.revenue.state.pa.us/revenue/cwp/view.asp?A=246&Q=291448 Rendell vs. Republicans in Fight for School Funding, Philadelphia Inquirer, May 12, 2009: http://www.philly.com/inquirer/education/20090512_Rendell_vs__Republicans_in_fight_for_school_funding.html Secretary Soderberg Describes Crisis in Revenues and Spending Caused by Recession; Year-End Revenue Shortfall Estimated at $3.2 Billion, Office of the Governor, June 11, 2009 -- Click on June 11, 2009: http://www.governor.state.pa.us/portal/server.pt/community/governor%27s_web_site/2985
Puerto Rico: The Magnitude of the Deficit Comes to Light Suddenly Compiled from several sources named in the text and in the links below.
*** Reuters, December 29, 2008: “Puerto Rico may be facing a sustained deficit of $3 billion for the next four fiscal years if the government fails to cut costs and boost revenues, the advisory council of Governor-elect Luis Fortuno said on Monday (December 29). . . . Fortuno, a Republican, is due to take office on January 2. Puerto Rico is expected to have a budget deficit of $3.2 billion for fiscal 2009, more than triple the original projected deficit of $1 billion. The magnitude of the deficit came to light during weeks of transition committee meetings following the November election and surprised investors and rating agencies alike.” *** New York Daily News, January 9, 2009: “Puerto Rico's new governor on Thursday (January 8) declared a fiscal emergency because of the U.S. Caribbean island's darkening budget forecasts and a towering deficit of $3.2 billion. Governor Luis Fortuno . . . proposed a fiscal plan calling for government agencies to slash operational costs by 10 percent in order to bring revenue and expenditures in line.” *** Caribbean Net News, January 12, 2009: On Friday (January 9), the newly elected governor “said he plans to borrow $1.2 billion to pay overdue debts and finance a $500 million economic stimulus package. After meeting with House and Senate legislative members at the governor's mansion, Fortuño said that he will be presenting three administrative packages in order to transfer an additional 1 percent from the 7 percent sales and use tax to pay off the new loan. Although the move will mean that the General Fund will stop receiving $200 million dollars from the sales and use tax monies, it will allow the government to take out a loan of up to $4 billion that will be paid back with the monies in the Urgent Interest Fund. . . . (The loan) will allow the government to pay government suppliers (monies) they owe in school supplies, social workers and other debts accumulated in the past administration. He added that the $500 million economic stimulus package will permit the government to build roads, hotels and schools, while at the same time help boost the island's stagnant economy.” *** Caribbean Net News, January 13, 2009: “Labor Department Secretary designate Miguel Romero called on Governor Luis Fortuño to carefully analyze the suggestions made by the Fiscal and Economic Reconstruction Advisory Board regarding firing 11,000 public workers and freezing all collective bargaining agreements, that were agreed on between government unions and the past administration. The recommendations were made public last week by the Board as possible alternatives to help solve the island's fiscal crisis. But Romero said that union collective bargaining agreements are protected by the Commonwealth's law; therefore the suggestion needs to be analyzed from a judicial and legal point of view before making a final determination on the matter.” *** Latin American Herald Tribune, January 16, 2009: “Puerto Rico Gov. Luis Fortuño signed into law Wednesday (January 14) four bills that include approval for billions of dollars in borrowing to ensure the U.S. commonwealth's 200,000 public employees continue getting paychecks. . . . Puerto Rico, with some 4 million residents, is suffering from inflation of more than 12 percent and unemployment of nearly 13 percent, while ratings agencies are threatening to downgrade its bonds to junk status.” *** Caribbean Net News, February 13, 2009: “Governor Luis Fortuño on Wednesday (February 11) ordered all government agencies to reduce spending, eliminate official vehicles, credit cards, cellular phones and lower electric bills that are paid with public funds in an attempt to take immediate measures in controlling government expenses. Fortuño also ordered all public agencies to come up with an elaborate plan to reduce electric bills, and all public workers that have excess vacation days must take time off to reduce accumulated time that is paid to government workers at the end of each year. *** Caribbean Net News, February 23, 2009: “During the last day of the 2009 Puerto Rico Credit Conference, where leading credit agencies made clear to the Commonwealth's government that concrete actions need to be taken before fiscal year ends on June 30 or the island's credit rating could face being downgraded to junk status, Governor Luis Fortuño spoke to investors and analysts about the measures his administration has taken to take care of the local fiscal crisis. . . . Fortuño (said) that he has implemented two Executive Orders mandating significant expense reductions in the central government agencies and departments. The governor said that his administration has revised predictions for the local economy up through fiscal year 2010 to ensure proper revenue and expenditure projections in the upcoming budget . . . (and) ‘in the next two weeks we will finish our analysis and we can go into details about the steps that need to be taken,’ Fortuño said. . . . On Thursday, Standard & Poor's Puerto Rico lead analyst Horacio Aldrete said, if there is a lack of decisive action in the short term, ‘our opinion of Puerto Rico's credit rating could change before the end of the current fiscal year.’” *** Latin American Herald Tribune, March 4, 2009: “Gov. Luis G. Fortuño announced Tuesday (March 3) a plan to take drastic measures to eliminate Puerto Rico’s large budget deficit, a move that includes laying off more than 30,000 public employees in the U.S. commonwealth. The elimination of 10 percent of the government jobs on the island will be done gradually and after offering retirement incentives and other voluntary measures to reduce public expenditures by around $2 billion. The Puerto Rican government is running a budget deficit of $3.2 billion. . . . The governor said that he will send to the Puerto Rican legislature four bills to establish control over public spending and a series of incentive plans for investments in public projects, as well as a temporary increase in taxes on company profits and affluent individuals. He also said that tax increases would be imposed on wine, beer and cigarettes. . . . Fortuño announced that he will reduce his own salary by 10 percent and will freeze salary hikes for public employees.” *** Caribbean Net News, March 12, 2009: “Governor Luis Fortuño signed into law three bills aimed at stabilizing the government’s ‘difficult fiscal situation’ and jump starting the island’s economic development. . . . Among the bills approved by both the House and Senate and signed into law by the Governor Tuesday (March 10) is the Special Law on the Fiscal Emergency or LESEF as the law is known by its Spanish acronym. . . . The law provides for additional revenue generating measures -- some temporary and some permanent, -- and sets forth a cost reduction plan and provides for a number of financial initiatives that will allow the government to come out of its present fiscal crisis, eliminating its recurrent budget deficit in four years. . . . Meanwhile, the Local Economic Stimulus Plan or PEEC as the plan is known by its Spanish acronym provides $500 million to stimulate the island’s economy and counter the potentially recessive effect of the fiscal measures implemented as part of the Economic and Fiscal Reconstruction Plan. The PEEC -- which complements the federal economic stimulus package -- will give priority to the construction of infrastructure works that will result in the immediate creation of new jobs. . . . Moreover, the Federal Economic Stimulus Law sets forth a mechanism to optimize and expedite the flow of some $5 billion in federal funds that have been assigned to Puerto Rico.” *** Caribbean Net News, March 21, 2009: A memo that 93 Puerto Rico government agency heads affected by the Fiscal Emergency Law received on Friday (March 20) will allow them to choose the way they want to inform their workers on how they plan to reduce payroll. Government agency heads will be able to speak with workers that will be affected face to face or opt to send them a letter, notifying them that they can step down from their post voluntarily within the next 30 days and receive a number of perks rather than being fired this summer if the central government doesn’t save some $200 million by that time.” *** Latin American Herald Tribune, March 28, 2009: “The unemployment index in Puerto Rico rose to 14.1 percent last month compared with 13 percent the month before, the Labor and Human Resources Department said Friday (March 27). An additional 17,000 people were left jobless in February. Compared with January 2008, the unemployment index rose by 3.5 percentage points from 10.6 to 14.1 percent.” *** Caribbean Business, April 29, 2009: “Gov. Luis Fortuño announced Wednesday night a proposed $7.67 billion General Fund budget for fiscal 2010 -- some $1.8 billion, or almost 20%, less than the $9.48 billion budgeted for fiscal 2009, which ends June 30. . . . Fortuño also announced a projected multi-annual budget projection through fiscal 2012. . . . The governor gave few details on spending cuts, but he had previously announced that as many as 30,000 public employees would have to be fired or enticed to leave government through retirement incentives during the next fiscal year to meet his goal of a $2 billion. He also announced plans to cut agency spending by 10% in other areas, among other austerity measures, put a moratorium for two years on negotiated pay hikes to public employees and tax credits to business, and institute a series of revenue measures, like a temporary increase in property taxes and a special 5% surtax on top wage earners and businesses.” *** Caribbean Business, May 14, 2009: “Only 2,450 public employees — 1,000 of them from the Education Department — have opted for voluntary buyouts, while 20 others have agreed to permanent workweek reductions with 10% pay cuts, according to preliminary data issued by the Office of Management & Budget (OMB). Public employees had an April 27 deadline to register for voluntary buyouts or workweek reductions. Teachers are among those exempt from Law 7, which seeks layoffs of 30,000 public workers to save $2 billion amid a $3.2 billion deficit.” *** U.S. Department of Education, May 29, 2009: “U.S. Secretary of Education Arne Duncan today announced that $434 million is now available for Puerto Rico under the American Recovery and Reinvestment Act (ARRA) of 2009. This funding will lay the foundation for a generation of education reform and help save hundreds of thousands of teaching jobs at risk of state and local budget cuts. Puerto Rico will be eligible to apply for another $214 million this fall.” *** Caribbean Business, June 4, 2009: “While Fiscal Emergency Law 7 calls for paring the public payroll throughout the course of the next fiscal year, which runs July 1, 2009 to June 30, 2010, administration officials are shooting to make all the dismissals by Dec. 31. . . . Some 7,816 government workers were let go last week. . . . Officials have refused to give an estimated total, saying they are trying to cut as much as possible from other areas to hold down the number of dismissals. During his budget address, Gov. Luis Fortuño said he “feared the number could reach 30,000.” *** Latin American Herald Tribune, June 5, 2009: “Thousands of union workers, students and members of grassroots organizations marched in front of Puerto Rico’s capitol Friday to protest Gov. Luis Fortuño’s plan to layoff 30,000 public employees as the U.S. commonwealth endures its fourth year of recession. Methodist Bishop Juan Vera, spokesman of the All Puerto Rico for Puerto Rico coalition that organized the march, said police estimated the size of the crowd at around 100,000, an unprecedented turnout for an event of this kind on the Caribbean island. Vera said the size of the protest prompted Fortuño to agree to a meeting next week with representatives of the coalition.” *** Wall Street Journal, June 10, 2009: “A Puerto Rico agency is poised to sell $4.5 billion of a new type of bond Wednesday to help the commonwealth reduce budget deficits this fiscal year and next, repay debt obligations, and fund an economic-stimulus plan.” _________________________________ Puerto Rico May Face Sustained $3 Billion Deficit, Reuters, December 29, 2008: http://uk.reuters.com/article/marketsNewsUS/idUKN2932037820081229 New Governor Declares Fiscal Emergency for Puerto Rico, New York Daily News, January 9, 2009: http://www.nydailynews.com/latino/2009/01/09/2009-01-09_new_governor_declares_fiscal_emergency_i.html Governor Declares Puerto Rico a Fiscal Emergency (and releases plans), Caribbean Net News, January 12, 2009: http://www.caribbeannetnews.com/news-13467--21-21--.html Puerto Governor Asked To Re-Analyze Fiscal and Economic Construction Proposals, Caribbean Net News, January 13, 2009: http://www.caribbeannetnews.com/news-13474--21-21--.html Puerto Rico Moves to Shore Up Government Deficits, Latin American Herald Tribune, January 16, 2009: http://www.laht.com/article.asp?ArticleId=325529&CategoryId=14092 Puerto Rico’s Governor Orders All Agencies to Cut Spending, Caribbean Net News, February 13, 2009: http://www.caribbeannetnews.com/news-14251--21-21--.html Puerto Rico Risks Rate Downgrading, Say Credit Agencies, Caribbean Net News, February 23, 2009: http://www.caribbeannetnews.com/news-14443--21-21--.html Puerto Rico to Shed More Than 30,000 Public Employees, Latin American Herald Tribune, March 4, 2009: http://www.laht.com/article.asp?ArticleId=328943&CategoryId=14092 Puerto Rico Governor Signs Economic and Fiscal Reconstruction Plan Into Law, Caribbean Net News, March 12, 2009: http://www.caribbeannetnews.com/pr/pr.php?news_id=14869&start=0&category_id=21 Puerto Rico’s Government Heads Given Choices in How They Inform Workers of Termination, Caribbean Net News, March 21, 2009: http://www.caribbeannetnews.com/pr/pr.php?news_id=15116&start=0&category_id=21 Big Jump in Puerto Rico Unemployment, Latin American Herald Tribune, March 28, 2009: http://www.laht.com/article.asp?ArticleId=330644&CategoryId=14092 Fortuno Announces $7.67 Billion Budget, Caribbean Business, April 29, 2009: http://www.caribbeanbusinesspr.com/news03.php?nt_id=29752&ct_id=1 *** The FY 2009-2010 Budget Summary is available at: http://www.gdbpr.com/documents/ProposedBudget2009-2010.pdf 2,450 Public Employees Opt for Buyouts, Caribbean Business, May 14, 2009: http://www.caribbeanbusinesspr.com/archives/ArcDetail2.php?archID=29149&NAME=Puerto%20Rico%20Budget $434 Million in Recovery Funds Now Available for Puerto Rico to Save Teaching Jobs and Drive Education Reform, U.S. Department of Education, May 29, 2009: http://www.ed.gov/news/pressreleases/2009/05/05282009a.html Government Aims to Complete Layoffs by Dec. 31, Caribbean Business, June 4, 2009 http://www.caribbeanbusinesspr.com/archives/ArcDetail2.php?archID=29323&NAME=Puerto%20Rico%20Budget Massive Protests in Puerto Rico Against Public Sector Layoffs, Latin American Herald Tribune, June 5, 2009: http://www.laht.com/article.asp?ArticleId=336685&CategoryId=14092 Puerto Rico to Sell Debt, Wall Street Journal, June 10, 2009: http://online.wsj.com/article/SB124459322396500275.html
Rhode Island: The Most Severe Budget Crisis in Years Compiled from several sources named in the text and in the links below.
*** New York Times, May 17, 2008: Rhode Island “is in the midst of its most severe budget crisis in years. To deal with budget shortfalls, it is terminating welfare benefits to 3,400 children whose parents had been on the welfare rolls for more than five years; let some nonviolent offenders out of prison early; and reduced health care benefits for State employees who retire after Sept. 30 to induce them to retire sooner. But just days after closing a $168 million gap in the current fiscal year’s (FY 2008) budget of $7 billion, State officials were told that the shortfall in next year’s budget had ballooned to at least $434 million. *** Office of the Governor, June 19, 2008: “Governor Donald L. Carcieri today announced his intention to sign the FY 2009 State budget plan that was approved today by the Rhode Island Senate. . . . ‘Working together over the last six months, we have successfully resolved a nearly half a billion dollar budget deficit without raising broad-based taxes,’ the Governor said. ‘That is a major accomplishment by any standard. But by contrast with past years, this budget plan represents a completely new way of doing in business in State government. . . . I am particularly pleased that this budget will drive major structural reforms that will reduce projected deficits in future years,’ Carcieri said. ‘I’m also excited that the General Assembly approved my proposals to reform both the welfare and state Medicaid systems.’” *** Office of the Governor, November 10, 2008: “Governor Donald L. Carcieri today issued a statement regarding the Revenue Estimating Conference's revised projection of State revenues for the current fiscal year. State revenues will fail to meet the enacted revenue estimate of $3.347 billion with an estimated revenue shortfall of $233.6 million. . . ‘We expected revenues to be down due to the current economic climate, but we did not anticipate the shortfall would be this great,’ Governor Carcieri said. ‘The gravity of the situation is going to require more dramatic steps. We have already made significant reductions in personnel costs and human service and social welfare programs, while attempting to minimize the impact on funding for cities and towns. Anticipating a drop in revenues, my staff has been meeting for the past several weeks to develop plans for closing the budget gap. Proposals are still being finalized, but the areas of focus include a reduction to local aid, State pensions, review of all State contracts and assets, program reductions, and a revision of revenue policies. Next week, I will look to meet with House and Senate leaders to review proposals and develop plans to address our current fiscal crisis.” *** Office of the Governor, January 7, 2009: “On Wednesday, January 7th, Governor Donald L. Carcieri submitted a Supplemental Budget for FY 2009 to the General Assembly for their consideration and approval. This budget erases a $350 million deficit that has been projected for this fiscal year without raising broad-based taxes or laying off State personnel. . . . The FY 2009 revised budget provides for a $189.8 million decrease in general revenue (a 5.8 percent decline). This budget reflects general revenue reductions in every category of spending. . . . The Supplemental Bill is being submitted earlier than statutorily required because of the magnitude of the projected budget deficit.” (Note: Rhode Island is one of three States that require a 2/3 or 3/4 vote to approve budget bills: Rhode Island (2/3), California; (2/3), Arkansas (3/4). *** Providence Journal, February 3, 2009: “A coalition of mayors and other chief executives from most of Rhode Island's largest communities this afternoon urged the legislature to restore all or at least a majority of the general revenue money that is being cut under a revised State budget. In a statement, the Coalition of Communities Improving RI said that unless the revenue sharing that cities and towns rely upon is fully or mostly restored, it will leave the towns' chief executives little alternative but to consider the ‘extreme course of action’ of spreading budget cuts through their entire budgets, including the school side of the ledger, which currently Rhode Island law does not allow.” *** Office of the Governor February 10, 2009: In his State of the State address, Governor Carcieri said that “we need every department of every city and town to sharpen their pencils, tighten their belts, and be smarter about how they spend the taxpayers’ money! . . . Our immediate challenge in the next few months will be to use the anticipated federal stimulus money wisely and sensibly. We must use the additional funding to bridge the deficit, support tax relief and structural reforms, grow jobs, and grow our economy. . . . Today, I signed an Executive Order creating the Office of Economic Recovery and Reinvestment to establish a transparent process to administer these federal funds. . . . In 1978, Rhode Island had 137,000 jobs in manufacturing which represented 34% of the entire workforce—today we have 46,000 representing under ten percent of the workforce. I am firmly convinced that if we dramatically change our tax structure, our economy will produce jobs! What Rhode Island needs now is more taxpayers; not more taxes. . . . My goal is to submit to the General Assembly, as part of my 2010 Budget, a new tax plan. A plan that brings income tax relief to Rhode Islanders, phases out the corporate income tax, and eventually eliminates our estate tax.” *** New York Times, February 28, 2009: “The smallest state, Rhode Island is saddled with some of the nation’s biggest problems: the second highest unemployment rate, at 10 percent, according to the latest federal figures; and among the highest foreclosure rates, widest budget gaps and most-vulnerable pension systems. . . . Unlike its neighbors, Rhode Island continues to rely heavily on blue-collar and service-industry jobs. Its largest employment sectors are health care, manufacturing and retail, which pay $27,000 to $46,000 a year on average. . . . Governor Carcieri has proposed a minimum retirement age of 59 for government workers and eliminating 3 percent annual increases in their pensions. The proposals are part of his plan to close a $357 million gap in this year’s budget, one of the largest in the country as a percentage of State spending.” *** Office of the Governor, March 10, 2009: “Governor Donald L. Carcieri today released his FY 2010 budget, as well as amendments to the Governor’s FY 2009 Supplemental. The Governor’s revised FY 2009 budget is $3.064 billion . . . a $204 million reduction in general revenue expenditures as compared by FY 2008, excluding the impact of funds from the American Recovery & Investment Act of 2009 (ARRA). General revenue expenditures for FY 2010 are $3.079 billion. . . . Under the ARRA, Rhode Island will receive $137.3 million in enhanced Medicaid match, allowing the State to apply those savings for other budget uses. . . . In FY 2009, federal stabilization funds available for education total $45 million ($38.3 million for K-12, $6.7 million for Higher Education). In FY 2010, the Governor recommends $45 million for education ($37.2 for K-12, $7.8 million for Higher Education). In the revised 2009 supplemental, the Governor is proposing the restoration of $31 million in local aid, offset by a reduction of $31 million in education aid, taking into account the availability of federal stimulus dollars. Under the amendments to the Governor’s FY 2009 supplemental, cities/towns will be required to allocate $12.6 million of general revenue sharing back to school districts based on past support of the schools. . . . The increase funding in Title I and Special Education under the ARRA represents a 5.9 percent increase in total education funding in 2010.” Among other things, the Governor’s budget also addresses pension reform; local aid/general revenue sharing; tax reform; and personnel. *** Budget Office, Department of Administration, March 10, 2009:In its budget summaries, the Budget Office includes the following on education: “The FY 2009 revised recommendation for Education agencies includes $1.975 billion, or $25.7 million less than enacted appropriations of $2.001 billion. As compared to the enacted budget, general revenue decreases $106.2 million or 9.4 percent; federal funds increase $56.8 million or 27.2 percent; restricted receipts decrease $369,829 or 4.2 percent; and other funds increase $24.0 million or 3.6 percent. ARRA funding comprises $44.9 million or 16.9 percent of the federal funds. . . . The Governor recommends total expenditures of $2.071 billion for Education in FY 2010, including $1.049 billion from general revenue; $306.6 million from federal funds; $8.7 million from restricted receipts; and $706.7 million from other funds. AARA funding comprises $92.2 million, or 30.1 percent of the federal funds. . . . The Governor’s general revenue recommendation of $1.049 billion for Education for FY 2010 is a decrease of $74.8 million or 6.7 percent from FY 2009 enacted levels.” Many other details are shown in this summary and in the summaries of other budget components shown on this page *** RI Department of Labor and Training, March 2009: “The RI Department of Labor and Training announced today that the State’s seasonally adjusted unemployment rate (for February) climbed two-tenths of a percent over January’s unemployment rate, reaching 10.5 percent in February. From January 2009 to February 2009, the U.S. unemployment rate rose five-tenths of a percent to reach 8.1 percent, its highest rate since December 1983. . . . In February, the number of unemployed RI residents — those residents who classify themselves as available for and actively seeking employment — increased by 1,900 over the month to reach 59,700. From February 2008 to February 2009, the number of unemployed RI residents increased 22,500. Due to numerous eligibility requirements, the number of unemployed RI residents differs from the number of RI unemployment insurance recipients. The average weekly claim load for RI unemployment insurance benefits in February was 40,640.” *** Providence Journal, April 3, 2009: “The Senate overwhelmingly approved a $7.2-billion budget-repair bill Thursday (April 2, a day after the House passed it) that leans heavily on federal stimulus money to erase a massive current-year deficit, prompting weary legislative leaders to condemn the tax-and-spend plan even as they voted to send it to the governor’s desk. . . Carcieri spokeswoman Amy Kempe said, ‘Most notably, the budget restores some aid to local communities, but fails to address the underlying issue of unfunded mandates. . . . In addition, by not passing pension reform, the General Assembly is not taking up one of the most important issues facing the State.’ Democratic leaders yesterday promised to change the State’s public pension system before the end of June. They also left the door open to raising the gasoline tax, a proposal they introduced last Friday, but abandoned Wednesday.” NOTE: This budget addresses deficits for the current fiscal year. *** RI Department of Revenue, April 6, 2009: In its newest report, the Department stated that “Fiscal Year 2009 total general revenues collected through March 2009 have decreased by 11.4 percent as compared to audited FY 2008 general revenues through March of last year. The growth rate lags behind the revised growth rate of -9.2 percent that was adopted by the principals at the November 2008 Revenue Estimating Conference. For the fiscal year-do-date period through March 2009, total general revenues were $2.047 billion as compared to $2.309 billion for the same period last year, a decrease of $262.3 million.” *** Office of the Governor, April 7, 2009: In a letter to the Speaker of the House and Speaker of the Senate, Governor Carcieri said that “I am transmitting herewith without my signature 2009-H5019 Sub A as amended. While the Supplemental Budget contains nearly 90% of my proposed budget, I will not sign it because it does not include the statutory pension reforms which are absolutely necessary to ensure sustainability. Rhode Island is facing a current unfunded pension liability of nearly $8 billion, and the problem is getting worse by the day. Absent significant changes to the pension system, the cost to taxpayers will double in less than ten years. That is unacceptable. I am well aware of the General Assembly’s commitment to make significant changes to the public employee pension system before the end of June. . . . As we move forward with the debate over the 2010 budget, these reforms will be critical for our municipalities to reduce their budgets. Further, in the 2010 budget we must reform our tax policy to make us competitive with Massachusetts and accelerate job growth. Accordingly, I am allowng this bill to become law, but without my signature and noting my concerns.” (NOTE: The total supplemental budget for the current fiscal year is approximately $7.3 billion and closes a $370 million deficit.) *** Office of the Governor, April 21, 2009: “Governor Carcieri’s Economic Development Corporation (EDC) Review Panel presented the Governor, Speaker of the House, Senate President and RI-EDC Board of Directors with a report outlining findings and recommendations to improve the State’s economic development agency and to strengthen the State’s economic development strategy and execution. . . . The review panel identified three areas of focus for improvement: (a) the need for an experienced, professional economic development executive to lead the EDC; (b) the need for a strong, focused Board, designed to ensure accountability and drive performance; and (c) a clear, coordinated and comprehensive economic development strategy.” *** Rhode Island Department of Labor and Training, May 2009: “Job losses continued in April, decreasing by 300 from March’s revised employment level (465,000). However, this month’s decline marks the lowest job loss since August 2008. . . . Our unemployment rate in April 2009 (11.1%) was up 0.5 of a percentage point from the revised prior month. . . . In April 2009, the number of unemployed RI residents climbed by 3,000 from March to 62,600 (the highest unemployment level on record). It was 22,300 above the year-ago level. The number of RI residents employed in April 2009 decreased by 4,100 to 500,800 and was down 27,700 from the April 2008 level. For the 22nd straight month, the number of employed was lower than its respective prior year level.” ** Rhode Island Department of Revenue, May 5, 2009: In its revenue report for April 2009, “the Department of Revenue finds that adjusted year-to-date April cash collections for Total General Revenues are less than expected based on the final enacted FY 2009 revenue estimates by $101.5 million, or -4.1 percent. In Total Taxes, the variance from final enacted expected collections if $73.6 million, or -3.8 percent. For Taxes and Departmental Receipts, the difference from final enacted expected collections is $94.3 million, or -4.3 percent. For Other General Revenue Sources, year-to-date April adjusted cash collections train the final enacted estimate by -2.4 percent, or $6.7 million.” *** Office of the Governor, May 12, 2009: “The Governor’s Office of Economic Recovery and Reinvestment and the RI Department of Labor and Training announced today that up to 2,600 unemployed Rhode Islanders who were deemed ineligible for State Extended Benefits may now collect benefits under this program, due to an option offered by the American Recovery and Reinvestment Act. This temporary change in eligibility will be effective through January 1, 2010.” *** Office of the Governor, May 18, 2009: “Governor Donald L. Carcieri today announced implementation of a one-day pay reduction (equivalent to ten percent of the bi-weekly total salary rate, excluding overtime) for certain non-union and union State employees to help close the budget shortfall for the current fiscal year, which ends June 30, 2009. The pay reduction shall be reflected in the June 12, 2009 paycheck. In 2008, the State of Rhode Island and numerous State employee unions entered into Memoranda of Settlement, as a result of collective bargaining, which provided for a one day pay reduction in June 2009. The State Budget Office estimates the cost savings for a one-day pay reduction to be approximately $2.44 million, inclusive of salaries and benefits. To offset the impact of this pay reduction, affected employees will be entitled to accrue one additional day of paid leave during that payroll period *** Office of the Governor, May 21, 2009: “As Governor Carcieri testified before the House Committee on Finance on his tax reform proposals, a new web video by the Governor was posted stressing the need for tax reform in Rhode Island to stimulate the economy and to grow revenues and jobs. The video, outlines the three tax reform proposals: phase out of the corporate income tax, personal income tax reform, and increasing the estate tax exemption. . . . In the web address, Governor Carcieri states, “As we struggle through this difficult economy, we need jobs more than ever before. If we don’t fix the problem now, we will continue to face the same obstacles to economic development and job growth when the stimulus money is gone, and other states are well on the road to recovery. By lowering the death and corporate income taxes, and by reducing the personal income tax brackets, Rhode Island will become competitive and attractive to new and existing businesses.” *** WRNI, Rhode Island’s National Public Radio Station, May 31, 2009: “As the General Assembly slouches into its sixth month, lawmakers have taken the familiar path and left the tough taxing and spending decisions until the last minute. . . . On the cost-cutting side, this looks like the year lawmakers will tackle a State employee and public school teacher pension system that has long been criticized as too generous and out of line with private sector retirement benefits. Legislative leaders are shooting for a June 26th adjournment, so the pension changes must be unveiled this week or next. As of last Friday (June 5), no serious negotiations had taken place with leaders of the unions representing teachers and state workers.” *** Office of the Governor, June 1, 2009: “Governor Donald L. Carcieri joined the RI Department of Labor and Training and the Workforce Partnership of Greater Island in awarding more than $2 million in Workforce Investment Act grants, funded by the American Recovery and Reinvestment Act, to run 18 youth-employment programs throughout the State this summer. An estimated 900 youth ages 14-24 are anticipated to be served throughout Workforce Partnership of Greater Rhode Island service area, which includes Northern RI, South County, West Bay and East Bay. This award represents approximately half of the $4 million Summer Youth Employment Opportunities initiative announced by Governor Carcieri in late March. The funding has been divided between the two local workforce investment boards, the Workforce Partnership of Greater Rhode Island and Workforce Solutions of Providence/Cranston. Workforce Solutions of Providence/Cranston is anticipated to announce more than 800 additional summer youth employment opportunities within its service area tomorrow.” _________________________________ Rhode Island’s Budget Crisis Deepens, New York Times, May 17, 2008: http://www.nytimes.com/2008/05/17/us/17rhode.html Carcieri Announces Plans To Sign FY 2009 Budget, Office of the Governor, June 19, 2008: http://www.ri.gov/GOVERNOR/view.php?id=6631 *** To see the FY 2009 Budget as Enacted: http://www.budget.ri.gov/Documents/CurrentFY/
South Carolina: A Budget Saga and a Struggle Over Stimulus Funds Compiled from various sources named in the text and in the links below.
*** Office of the Governor, January 7, 2008: Gov. Mark Sanford today released a balanced, activity-based $6.8 billion spending plan for Fiscal Year 2008-09. . . . The governor’s budget spends $326 million less than last year, about a 4.6 percent reduction. Even with that reduction, the recommended spending level still represents a 36 percent increase in State spending over the past five years, and roughly 7 percent annual growth. . . . This year, economists are projecting roughly $200 million in new money coming into Columbia, over $1 billion less than last year’s new revenue growth.” *** Office of the Governor, June 5, 2008: “Governor Mark Sanford today said the General Assembly may have broken the law in passing a (2008-2009) budget they knew to be out of balance - and therefore unconstitutional - and that doing so could open the State up to a legal challenge. . . . Last week, the governor vetoed 69 items from the legislature's spending plan, for a total of $72 million, saying that money should be put toward the anticipated deficits at Education and Corrections. Of those 69 vetoes, the legislature only sustained five that had implications for the State's general fund, for a total of $369,000.” *** Office of the Governor, October 8, 2008: “Governor Mark Sanford issued a statement on the State’s Board of Economic Advisors’ decision to cut State revenue estimates by six percent, necessitating $420 million dollars in spending cuts. . . . (The Governor said that) ‘the size and duration of the cuts we knew were coming based on the legislature’s choice to run-up government spending will be intensified and prolonged because of the scale of what’s happening in global credit markets. . . . We’ve begun the process of working with agency heads on targeting these cuts in a responsible fashion, and look forward to working with the General Assembly to help them formulate their plan for addressing this.’” *** Office of the Governor, October 30, 2008: “Last week the General Assembly sent the Governor a plan to cut nearly $500 million from the State budget, a move made necessary by severe overspending and growing government by 40 percent over the past four years - a rate far faster than the underlying economy. . . . While expressing ‘serious reservations’ about a number of a flexibility-limiting provisions in the legislature’s targeted spending cuts plan, Governor Mark Sanford today announced he would allow the plan to become law and withhold any budget vetoes.” *** The Post and Courier, Charleston, November 22, 2008: “Mental health patients are backing up in emergency rooms across the State, some waiting weeks for psychiatric beds to open or for arrangements to be made with outpatient facilities. . . . State budget cuts are eating away at an already strained mental health care system. Compound that scenario with the holiday season and the economic crisis.” *** The Post and Courier, Charleston, November 22, 2008: “The state Department of Disabilities and Special Needs axed five child day-care programs, including the Webb Center in Charleston, to keep the Coastal Center in Ladson and other residential facilities off the chopping block, a department spokeswoman said Friday. . . . Parents of 30 children cared for at the Webb Center are desperate to find another place for their kids because the department announced last week the center will close in about five weeks because of the State budget crunch. . . . Their kids, who have disabilities including mental retardation, autism, Down syndrome and Fragile X syndrome, receive specialized day care at the Webb Center that the parents fear can't be found elsewhere. . . . The State is exploring options for Webb Center parents, such as providing specialized training for child-care providers at other day-care centers willing to take Webb Center kids, and developing after-school programs for the kids. . . . Because of the economy, more cuts may be necessary on top of the 11.2 percent, or $21.5 million, already axed from the department’s budget by the General Assembly. State departments have been notified to be prepared for the possibility of an additional 2 percent budget cut that may happen in the next two months, officials said. *** The Post and Courier, Charleston, December 11, 2008:Budgets for State agencies were equally cut by 7 percent Thursday (December 11) to make up for a shortfall that's now reached a billion dollars. The Budget and Control Board voted 4-1 to cut spending by about $383 million to accommodate the revised revenue estimates by the Board of Economic Advisors for the past two months. . . . The budget cuts come one day after the State's economic forecasters projected unemployment will reach 14 percent, the highest for South Carolina on record with the U.S. Bureau of Labor Statistics.” *** The Post and Courier, Charleston, January 6, 2009: “Superintendent of Education Jim Rex laid out Tuesday what he believes is a realistic vision for the State's public schools in an economic situation that no one anticipated. Underlying all budget requests Rex made before a House Ways and Means subcommittee is an appeal for the Legislature to grant the Department of Education flexibility from State mandates so the agency can deal with significant budget cuts that's left public schools ‘limping.’ . . . Rex also detailed changes to the budget requests he made to Gov. Mark Sanford in August (when) the Education Department (a) was no longer seeking $72 million to expand early education programs to all at-risk children who qualify but $28 million to maintain skeleton programs already in place; (b) abandoned a $24 million request to address the critical need for teachers and $15 million to increase salaries for school nurses; and (c) scaled back on textbook purchases.” Highlights of new suggested budget reductions include bus reducing driver salaries; freezing teacher salaries; reducing the request for maintenance and fuel costs due to the decreasing cost of fuel; and allowing higher paid Education Department employees to take mandatory furloughs to spare lower-paid workers the loss. *** Office of the Governor, January 9, 2009: “Gov. Mark Sanford today released . . . a balanced, activity-based $5.8 billion spending plan for Fiscal Year 2009-10 that prioritizes spending in a tough budget year, provides for an optional income tax rate cut while phasing out the corporate income tax, offers $267 million in cost savings, and largely protects core government functions such as education, law enforcement, and healthcare. . . . The governor’s budget, which will be submitted to the South Carolina General Assembly, was crafted again this year following a series of public agency budget hearings and working with different ‘results teams’ composed of State employees, board appointees, private citizens and issue advocates who were asked to rank roughly 1,600 different government activities in order of priority.” An accompanying fact sheet (click at the right) shows that “the governor’s budget increases total per-student spending from a current level of $11,157 to $11,628. The budget grants additional flexibility in spending those education dollars, with the goal of getting more money into the classroom. In addition, the budget funds continuation of the State’s 4K pilot program with $20.5 million. The budget also proposes a cost savings from scholarships to students who complete high school early, and adds $5 million to needs-based scholarships. . . . The budget fully funds the Medicaid program’s maintenance of effort with $137 million.” *** Office of the Governor, January 2009: In his 2009 State of the State Address, Governor Sanford said that he asks “for your will and work on just five areas this year. . . . First, we need to make the business climate more competitive. At the top of the list on this front is the tax reform proposal we rolled out last month. . . . The second change we think essential in bettering the lives of South Carolinians is restructuring our State government. . . . The third area lies in more fully opening up the workings of our State government so that our citizens can better understand not only what happened when a change is made -- but why it happened. . . . The fourth key to making our State more competitive and indeed doing things we should have been doing for a long time in instituting spending limits. . . . The fifth step that I believe we can take this year to better life and opportunity for South Carolinians rests on bettering our educational system. . . .I think it’s vital we look for ways to ensure our educational system has plenty of choices that reflect the individual diversity found in the more than 700,000 students in our State. We also need to find ways to better spend monies currently in the system. . . . Accordingly, our four goals on this front are as follows: (a) let’s enact education funding that follows the child (student mobility); (b) let’s pass a Charter School Parity bill; . . . (c) If we limit choice to simply a monopoly of public schools, we will never have real choice; . . . (d) let’s link the price of higher education to its cost, By capping its increase, we would force coordination -- which is key to preventing higher education from continuing to spiral out of the reach of working families.” *** Greenville News, February 25, 2009: “The State Department of Health and Human Services plans to restore most of the Medicaid eligibility cuts it made when its budget was slashed, enabling South Carolina to qualify for extra federal funding for the program after all. . . . DHHS saw its budget cut $137 million, or 15 percent, last year . . . Combined with the loss of federal matching funds, the total impact was $459 million. . . . Now, in order to get the additional $173 million for Medicaid from the $787 billion stimulus bill announced by President Obama, most of those programs could be restored. . . .Those funds are scheduled to become available today to States that qualify. . . . Joel Sawyer, spokesman for Gov. Mark Sanford, declined comment, saying the House budget plan is still under review.” *** Post and Courier, Charleston, March 18, 2009: “A South Carolina budget oversight panel Wednesday cut $102 million from the remainder of this year’s State spending plan to head off a potential budget shortfall. . . . The State Education Department loses $44 million, pushing its budget loss to more than $400 million when reductions in a sales tax fund are included. Education Superintendent Jim Rex told the Senate Finance Committee Tuesday that he’s surveying schools districts and has found 300 staff layoffs and 1,100 positions left open.” *** Post and Courier, Charleston, March 21, 2009: “It's up to South Carolina's legislators to decide how to spend federal stimulus money. Gov. Mark Sanford decided he won't take it Friday (March 20) after failing to persuade President Obama to let him use $700 million of the State's share to pay down debt. Key legislators were quick to respond with assurances that they plan to spend it. . . . In all, South Carolina could receive as much as $8 billion, including all the tax credits and grant money available.” *** The State. Columbia, April 1, 2009: “State lawmakers have no ability to circumvent Gov. Mark Sanford’s refusal of $700 million in federal stimulus money, according to an opinion issued Tuesday by Attorney General Henry McMaster. The decision leaves in limbo whether lawmakers will be able to tap $350 million federal funding this year to pay for education and public safety and help balance the State budget that begins July 1. The State has been allotted about $2.8 billion in federal aid over the next two years. McMaster said a court will likely have to resolve the issue.” *** The State, Columbia, April 2, 2009: “More than 1,000 teachers, college students and others converged on the State House Wednesday with a message for Gov. Mark Sanford -- Take the $700 million in federal stimulus money. Without it, an estimated 1,700 teachers . . . could lose their jobs, according to the state Department of Education. Estimates by some Democratic lawmakers put the job loss number in the 3,000 to 4,000 range.” *** Post and Courier, Charleston, April 4, 2009: “Less than 10 hours before deadline, Gov. Mark Sanford sent a letter to the Obama administration Friday to accept on behalf of South Carolina all but $700 million of the nearly $8 billion in federal stimulus money the State stands to receive to jump-start its economy. . . . The two-term Republican governor warned the public school system, the intended primary recipient of the $700 million over two years, to not bank on getting the cash. . . . The governor said he will not apply for the $700 million in budget aid unless the Legislature uses an equal amount of State dollars to pay down debt. . . . The White House told Sanford twice that he could not use the federal money to pay debt. *** The State, Columbia SC, April 5, 2009: This newspaper published a guest column by Governor Mark Sanford on the federal stimulus funds. Among many other things, the Governor wrote that “much has been suggested over the past few weeks — as the Democratic National Committee ran ads and State Senate Finance Chairman Hugh Leatherman outlined a so-called ‘chaos’ budget — meant to scare people into believing that I would be courting disaster for South Carolinians if my administration didn’t walk lockstep with the Obama administration in spending all the stimulus money as Washington thinks best. I believe this is the wrong way to push for the spending they want, and I understand many people are concerned. So I want to set a few things straight. Although there is a great temptation to expand my rationale to include what I believe to be the disastrous long-term consequences that come to our nation in spending money we don’t have — and in issuing yet more debt to solve a problem that was created by too much debt — I will stick with why I believe the Obama administration’s package doesn’t work for South Carolina as configured, and why I think it is so important to custom-fit stimulus efforts to the State in question.” *** The Beaufort Gazette, May 14, 2009: “’Comprehensive tax reform is essential to adequate, fair funding for public schools,’ State superintendent Jim Rex told the League of Women Voters of Hilton Head Island on Thursday (May 14). . . . Schools across the State have absorbed nearly $400 million in budget cuts this year. Rex partly attributed the shortfall to a 2006 law that replaced school property taxes on owner-occupied homes with a 1-cent sales tax.” *** Greenville News, May 15, 2009: “The Legislature on Thursday gave final approval to a resolution asking the federal government for the disputed $700 million. Lawmakers had already approved a budget (on May 12) with $350 million of the stimulus aid opposed by Sanford, as well as a requirement that the governor seek and accept the funds. Thursday's resolution was added as a result of a clause in the federal stimulus legislation that gave State legislatures the option of seeking the funds if a governor did not. . . . The Governor has until midnight Tuesday (May 19) to respond to the budget.” *** Office of the Governor, May 19, 2000: “Governor Mark Sanford today vetoed State budget sections compelling him to spend stimulus funds, saying the budget failed to put South Carolina in a better post-stimulus financial position, and that it wasted a once-in-a-generation chance to make much-needed reforms to State government. Governor Sanford vetoed part 1A of the budget (the budget’s main spending portion) and Part 3, the portion that directs stimulus spending, in their entirety. Governor Sanford has advocated throughout the budgeting process using $700 million in stimulus money -- about 10 percent of the total headed to South Carolina -- to pay down state debt. The governor separately vetoed 47 provisos that made inefficient structural changes, continued wasteful practices, or represented misplaced priorities. In his veto message, the governor said the spending plan suffered from fundamental flaws in the way it failed to set priorities and failed to take advantage of the opportunity provided by the stimulus to address debt repayment like the $20 billion in unpaid-for political promises tied to the retirement system.” *** WCBD News-2, Charleston, May 22, 2009: “The South Carolina Association of School Administrators (SCASA) on Friday filed a lawsuit requesting that the State Supreme Court order Governor Mark Sanford to comply with the state budget by applying for stimulus money to be distributed to school districts, universities, and various state agencies.” (NOTE: “In response to a planned lawsuit to be filed in the S.C. Supreme Court, Governor Mark Sanford has filed a federal suit to stop a disputed 10 percent of total stimulus funds from being spent in South Carolina unless they’re used to pay down debt,” Office of the Governor, May 21, 2009.) *** Greenville News, May 23, 2009: “Two students, including a high school senior who asked the South Carolina Supreme Court last month to decide the stimulus issue, filed a petition Friday (May 22) asking the justices to allow the Legislature to seek and accept $700 million in stimulus money. Chief Justice Jean Toal immediately responded, ordering a response from the State no later than noon on Tuesday (May 26) ‘because of the urgency of this matter.’ The filing came a day after Gov. Mark Sanford took the issue to federal court, arguing that the Legislature usurped the governor's power by passing a budget with a provision that forces him to apply for the money.” *** Greenville News, May 29, 2009: “State Superintendent of Education Jim Rex said Thursday he would apply for an extension for federal stimulus money if the courts don't settle the dispute between the Legislature and the governor by the July 1 deadline set by the U.S. Department of Education.” *** Office of the Governor, June 1, 2009: “After a federal judge today sent two stimulus lawsuits back to the State Supreme Court, Governor Mark Sanford said he would not make any State or federal appeals of whatever is decided by the State’s top court, and will abide by whatever their decision is regarding a disputed $700 million in federal stimulus funds. Governor Sanford had sought to use state dollars equal to about 10 percent of stimulus funds South Carolina was slated for in order to pay down State debt, . . . Two state suits had been filed seeking to force the governor to apply for the federal funds. The governor had sought to have those claims consolidated with his own and have all three heard in federal court. With the federal judge sending two suits back to state court today, the state Supreme Court will almost certainly make the final ruling in the case.” *** Post and Courier, Charleston, June 2, 2009: “Hundreds of people packed into South Carolina's annual teachers' job fair Monday as laid-off teachers, recent college graduates and others trying to relocate from across the nation competed for limited classroom openings. . . . As of last week, there were 300 teacher jobs listed statewide. Fewer were available Monday, with just 40 percent of the State's 85 school districts attending. Some of those had no openings, but officials said they were there to collect resumes for future prospects. Districts had plenty of candidates to pick from, collecting stacks of resumes several inches thick. That compares with 75 percent of districts attending last year, with 900 openings.“ *** South Carolina Department of Education, June 2, 2009: “State Superintendent of Education Jim Rex said that South Carolina hopes to participate ‘to whatever extent possible’ in a national effort announced Monday (June 1) that aims to develop common academic standards in mathematics and English language arts. The State cannot officially join the Common Core State Standards Initiative, sponsored by the National Governor’s Association and the Council of Chief State School Officers because Gov. Mark Sanford refused to co-sign South Carolina’s application with Rex.” (NOTE: On June 1, the Council of Chief State School Officers reported that 49 States and Territories had joined the Common Core State Standards Initiative.) *** Post and Courier, Charleston, June 5, 2009: “The State Supreme Court said Thursday that Gov. Mark Sanford must accept federal stimulus funds. Sanford lost a months-long battle when the high court forced him to draw down $700 million in stimulus money, most of which will go toward South Carolina public schools. . . . The recession has left schools struggling after several rounds of budget cuts, and State Superintendent of Education Jim Rex said the stimulus cash will provide relief. The $700 million will be split between the next two years, including $184 million that will be divided among the State's 85 districts in the coming school year. Colleges and universities will receive $105 million this year, and $57 million is designated for law enforcement programs.” (NOTE: The Governor submitted South Carolina’s application for stimulus funds on June 8.) *** Charleston Business Journal, June 12, 2009: “South Carolina’s recession has not yet hit bottom, and it could well produce 15% unemployment by early next year, economist Donald Schunk told the State’s Board of Economic Advisors. Acting on Schunk’s advice and its own weak revenue numbers, the board cut its State revenue forecasts Thursday for the budget year that ends June 30 and for the next fiscal year. The current year’s estimate was cut by $92 million. Next year’s estimate was cut by 2%, or $120 million, to $5.95 billion. . . . This year’s shortfall could be covered by reserve funds or further trims by the Budget and Control Board.” _________________________________ Budget Cuts Overall Spending, Provides Income Tax Relief , Pays for Future Promises, Fully Funds Core Services: Office of the Governor, January 7, 2008. http://www.scgovernor.com/news/releases/jan_7_2008.htm Governor: Budget Unconstitutional, Could Lead to Legal Challenges, Office of the Governor, June 5, 2008: http://www.scgovernor.com/news/releases/news_release_june08_06-05-08.htm Governor Says It’s Absolutely Key for General Assembly To Deal With Cuts Soon, Office of the Governor, October 8, 2008: http://www.scgovernor.com/news/releases/oct-8-2008.htm Governor Sanford Expresses Budget Reservations, Withholds Vetoes, Office of the Governor, October 30, 2008: http://www.scgovernor.com/news/releases/10-30-2008.htm Resources Dwindle, Mental Health Patients Back Up in Emergency Rooms, The Post and Courier, Charleston, November 22, 2008: http://www.charleston.net/news/2008/nov/22/mentalerweb62562/ Webb Center Falls to Budget Cuts, The Post and Courier, Charleston, November 22, 2008: http://www.charleston.net/news/2008/nov/22/webb_center_falls_budget_cuts62682/ Agency Budgets Slashed by Another 7 Percent, The Post and Courier, Charleston, December 11, 2008: http://www.charleston.net/news/2008/dec/11/
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