Initial Review of Governor’s Budget FY 2011

Does the Governor’s Budget Spend Less than the State Takes in?

No. In addition to general fund appropriations of $5.32 billion, the Governor uses $387 million in one-time money to increase spending:

  • $207.5 million from the Cash Reserve Fund
  • $37.7 million from the Senior Living Trust Fund for Medicaid
  • $48 million in stimulus money for education and general purpose
  • $94.2 million in stimulus for Medicaid expenditures

Total spending on general fund items is $5.707 billion

Does the Governor’s Budget Raise Taxes?

Yes. The Governor claims to fund 2 percent allowable growth for K-12 education at $333 million. This is $233 million from the general fund and $100 million from the Cash Reserve Fund. LSA estimates that 2 percent will cost $514 million in FY 2011. Therefore, he underfunds the 2 percent by $170 million. Since the spending authority remains, the $170 million can be made up with in property tax increases. The Governor also proposes other property tax increases by funding the property tax credits below last year’s level and funding the State Patrol out of the Road Use Tax Fund. Both will increase property taxes.

How much is the reorganization savings and is it real?

Unclear. The Governor plugs in $341 million in reorganization savings. Some of the things (IT consolidation, reducing the fleet, eliminating phantom employees) were House Republican ideas from last year. Some of the ideas like increasing unclaimed property and federal grants appear to be dubious at best. Also, $50 million of the savings is for shifting the State Patrol into the RUTF and that is unlikely to happen.