WA State 2009-11 Budget OFM
Upcoming SlideShare
Loading in...5
×
 

WA State 2009-11 Budget OFM

on

  • 691 views

Washington State Office of Finance Management's Budget Issues.

Washington State Office of Finance Management's Budget Issues.

Statistics

Views

Total Views
691
Views on SlideShare
691
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

WA State 2009-11 Budget OFM WA State 2009-11 Budget OFM Presentation Transcript

  • The 2009-11 Budget Story Where we’ve been and where we are now Prepared by the Office of Financial Management Nov. 16, 2009
  • Overview • Over past 18 months, Washington has seen largest drop in revenue in recent memory. • Last session, we closed $9 billion shortfall through: – cuts to programs and services – use of Recovery Act funds – fund transfers, including Rainy Day Fund • As revenue projections continue to decline, we will need to cut more to stay in balance. • Reduction options are limited by constitutional and federal spending mandates. This will narrow our choices. 11/16/2009 2
  • $9 Billion Problem by March 2009 $0 -$1 Initial $3 billion problem due to increasing costs -$2 -$3 -$4 Cumulative $6 billion Billions -$5 revenue -$6 lost -$7 -$8 -$9 -$10 Feb-08 Jun-08 Sep-08 Nov-08 Mar-09 • Before recession, $3 billion problem projected for 2009-11 due to health care inflation, K-12 growth, prison population growth, pension obligations. • Problem grew with recession, resulting in $6 billion loss in revenue from Feb. 2008 - March 2009. 11/16/2009 3
  • Solving $9 Billion Gap: Actions to balance budget Early reductions $.3 B Rainy Day Fund $.4 B Froze Cut programs pay, transferr $3.3 B ed funds $2.1 B Recovery Act $3 B 11/16/2009 4
  • $3.3 Billion in Cuts and Efficiencies: Examples • $600 million in K-12 through class size increases. • $557 million in higher education by reducing 1,800 employees and raising tuition 14% (universities), 7% (community colleges) per year. • $386 million through administrative or across-the-board cuts. • $255 million from Basic Health Plan by increasing premiums 70% and reducing enrollment by 36,000 (36%). • $127 million in payments to hospitals. • $130 million from Corrections, including $73 million by reducing beds and community supervision. 11/16/2009 5
  • All Areas of Budget Cut Percent Reduction* Low Income Other Human Higher Health Care Services All Other** Education K-12 Education -5% -7% -8% -8% -11% * Includes adjustments for additional tuition and Recovery Act money that offset reductions. Excludes compensation and special appropriations. ** Includes general government (including legislative and judicial agencies); natural resources; 6 transportation; other education agencies.
  • Other States in Same Predicament • 48 states have addressed or still face shortfalls for FY2010. • 49 states had total tax revenue fall during 2nd quarter; 36 report double-digit declines. • 25+ states face new shortfalls after balancing budgets just months ago. 11/16/2009 7
  • Sources of $2.0 Billion Shortfall Revenues dropping • $686 million June forecast • $238 million September forecast • $237 million tax lawsuit • $32 million October revenue collections • $65 million November revenue collections • $1.26 billion Subtotal Costs rising, issues emerging • $659 million increased demand for health care, schools, prisons • $12 million forest fires, landslides, dam failures, other possible emergencies • $71 million lawsuits blocking planned cuts • $742 million Subtotal 11/16/2009 8
  • What Should We Expect? Revenue uncertainty continues According to state Economic and Revenue Forecast Council: • State revenues will lag economic recovery • Job growth will lag economic recovery • Unemployment will remain high • Less revenue expected in 2009-11 than collected in 2007-09 11/16/2009 9
  • Majority of $31 Billion Budget Is Protected: Tied to state constitutional or federal requirements Corrections General 5% Not protected Government/Other $9.3 billion 5% Other Human Services Other K-12 2% 17% Higher Mandatory Education 1% Medicaid/Foster Higher Ed: Care 14% Fed. Require. 8% Debt Service/ Pensions 7% K-12 Basic Education 41% Protected $21.6 billion 70% of the Budget Is Protected 10
  • Possible Areas for More Cuts: Non-Protected Budget • Mental health and developmental disabilities services: $1.6 billion • Prisons/community supervision of offenders: $1.6 Subject to billion reductions • Care for low-income elderly: $1.3 billion • Economic support for low-income families: $1.1 billion • K-12 non-basic education funding (class size reduction, others): $635 million Protected • Higher education: $500 million (most is financial aid) • Juvenile corrections: $198 million 11/16/2009 11
  • Examples Not Enough to Fill Gap: Non-Protected Budget • Eliminating all state-funded environmental and natural resource protection, and all recreation and parks programs : $364 million. Subject to • Eliminating all of the legislative and judicial branches of reductions state government : $335 million. • Eliminating all state support for cultural and art organizations, and all early learning programs: $164 million. Protected • Eliminating 23 of smallest general fund agencies: $52 million 11/16/2009 12
  • How Big is $2.0 Billion? 1 Close all community and technical colleges $1.4 billion Close Dept. of Commerce $103 million Close Dept. of Revenue $218 million TOTAL $1.72 billion 2 Eliminate all state funding for UW, WSU $1 billion Eliminate all state funding for CWU, EWU, WWU, TESC $337 million Eliminate all state funding for Dept. of Health $193 million TOTAL $1.53 billion 3 Close Dept. of Corrections $1.6 billion 11/16/2009 13
  • Budget Timeline Time Action Mid December Governor’s Supplemental Budget released Feb. 18, 2010 Revenue forecast released March 11, 2010 Session adjourns 11/16/2009 14