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Senator Jack Hill's "Notes From The Senate"
Thursday, 09 April 2009

April 9--MARCH REVENUES--NOT MUCH WORSE--NOT ANY BETTER

March revenues released this week declined 14.3% or -$167 million.  The last four months have averaged over a $200 million decline, so the rate of decrease is less.  But, if the present trend continues, the state will not make the 09 budgeted target and state reserves of only $562 million will be drained.

 

Individual income taxes, half of revenues, continue to show sharp declines this month at minus 18.8%.  This revenue source contains employee withholding taxes and taxes by small businesses and individuals.

 

Sales tax collections declined by 14.4%.  Corporate tax collections were down for the month 23.6% or $37M.  Fuel tax collections declined by $23.4M or 28.6%.

 

Year to date, total collections show a 8.0% decline which sounds better until you remember we are budgeted at a minus 7% reduction.  Individual Income Taxes show a negative 8.8% for the year, sales taxes a 6.3% decline and corporate taxes are down 35%,

 

Motor Fuel collections of both excise and sales taxes are down for the year

$77M.  Any shortfalls under budgeted amounts have to be made up from general revenues; or in this year from the Shortfall Reserve Fund.

 

If the negative trend of the last few months continues, the state will likely use up the majority or all of the $562 million in reserve Funds leaving nothing in reserve for the 2010 budget year.

 

2010 STATE BUDGET--DEEP CUTS ACROSS THE BOARD--FEW ADDS

The FY 2010 state budget passed late Friday, April 3, which contained few additions and continued 8% plus cuts government wide except for k-12 education which took only a 3% cut. The $3.3B hole in the budget was filled by $476M in Reserve funds, $1.2B in Federal stimulus funds, $88M in one-time funds, and $1.3B in cuts to agencies.

This budget:

            --Fully funds Medicaid for the full year per current projections

            --Restores the 10% cut to Hospitals state-wide

            --Restores the 6% cut to Medicaid providers also in the Governor's budget

            --Restores funding for School nurses

            --Continues funding at base salary level for National Board Certified Teachers

            --Contains no cuts that would cause teacher furloughs

            --Does not change present State Health insurance benefits

            --Leaves approximately $1 billion of Federal stimulus funds for the critically    

               short FY 2011 budget

            --Provides 3000 new slots for the Lottery funded Pre-K program--$350 million in

               Lottery funds

            --$1.2 Billion in bonded projects for infrastructure including Ports and Water and

               Sewer Loans and other building projects

            --Funds $297 m in K-12 Capital Outlay school projects

            --$534 million in building projects for Higher Education including $37M for new

               Libraries statewide

            --Restores cuts for services for the elderly for "Meals on Wheels'"

           -- Restores funds for respite care for families of Alzheimers sufferers

           -- Provides additional MRWP waiver slots to “Unlock the Waiting list"

           -- Restores cuts to Public Defenders Council for critical needs

            --Restores funds to protect Wildlife Management Area Federal leases

            --Enhances Consumer Protection inspectors for the Department of Agriculture

            --Contains additional marketing funds for Tourism

            --Gives Department of Natural Resources latitude to manage State Parks, golf

               courses and lodges to be sustainable

            --Budgets for the new Department of Behavioral Health and for the transfer of

               the Public Health Dept to DCH

            --Funds HOPE scholarships of over $500 million for public and private colleges

            --Bonds $100 million in Road projects statewide (additional to $900M in stimulus

               road funds)

            --There are no "pork" or "earmark adds" in this budget

 

It would be an optimistic view to believe that more budget revisions are not necessary this summer

 
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