July 19, 2011
The Governor and Legislature have now finished work on a budget for Fiscal Year 2012 that addresses a $1.9 billion gap primarily with a combination of cuts and reforms. The outlook for the future remains uncertain. On the bright side, state tax revenue collections have been significantly exceeding projections. (Data released today indicate that the FY 2011 tax revenue total was $723 million above the revised estimate). But there are also reasons for concern: the national economic recovery remains fragile; while the FY 2012 budget relies on less temporary revenue than the FY 2011 budget, it still relies on close to half a billion dollars of such revenue; and the budget assumes significant Medicaid savings that will be very challenging to achieve in full.
The FY 2012 budget includes deep cuts in a number of areas including $24 million from the Judiciary (including probation) and over $60 million in public higher education. The final version of the budget also includes $460 million less in local aid in FY 2012 than in the original FY 2009 budget, after accounting for inflation.
This Budget Monitor discusses in more detail several reform initiatives, the funding proposals in the state budget, and the temporary and ongoing revenue initiatives on which the budget depends. The Monitor also compares proposed funding levels for FY 2012 to the FY 2011 levels, and, in some cases to previous years' funding levels.
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