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Friday, August 30, 2019

NOTES FROM THE SENATE, AUGUST 30, 2019

HERE'S WHERE EVERY PENNY OF THE BUDGET INCREASES WENT

Last week, I mentioned those who claim state spending has increased billions of dollars as the state budget has increased over the years. They say this to infer that somehow spending has been out of control or it must have been for there to have been these increases.

BUDGET INCREASES SINCE 2010

Of course, 2010 was in the middle of the Great Recession and the state funds budget dropped to a low of $17 billion as budget writers reduced state spending to meet the dramatic decline in state revenues. Some $3.2 billion in Federal funds delayed some cuts until 2012 but even then the budget was less than before the recession.

State Funds Budgets- As Passed
2009 $ 18,903,699,531
2010 $ 17,074,653,179
2011 $ 18,063,622,184
2012 $ 18,503,799,022
2013 $ 19,325,217,673
2014 $ 20,234,238,575
2015 $ 21,112,906,096
2016 $ 23,065,473,796
2017 $ 24,345,494,024
2018 $ 25,413,015,092
2019 $ 26,933,425,042
2020 $ 27,544,569,129

WHERE DID THE NEW SPENDING EACH YEAR GO?

The staff of the Senate Budget and Evaluation Office went through budgets dating back to 2010 and analyzed where all of the increased spending each year went and categorized the expenditures. First, though, here are the categories of the areas where new expenditures are divided:

Non-Discretionary Spending $ 11.157 Billion (Entitlements, based on formulas)

Reductions $ -8.082 Billion (Cuts during recession)

Discretionary Spending $3.727 Billion

Other/State Funds $2.4 Million

ARRA (Federal Emergency Funds)Net of spending cuts $-784.5 Million (Federal funds totaled $3.2 Billion)

Bonds $ -43.2 Million

TOTAL $ 8.373 Billion

HOW DOES THAT SPENDING BREAK DOWN....WHAT WAS IT SPENT ON?

DISCRETIONARY ADDS...TOTAL OF ALL 11 YEARS

PreK-12 (Discretionary Adds) $1.01 Billion
Merit Pay $501.3 Million
Natural Resources, Economic Development, Transportation (Discretionary Adds) $467.2
Million
Provider Rates, CoPays and Private Disproportionate Share Adds $422.3 Million
Health & Human Services (Discretionary Adds) $465.4 Million
General Government (Discretionary Adds) $98.4 Million
Higher Education (Discretionary Adds) $259.3 Million
Law Enforcement Pay $128.7 Million
Prisons, Courts, Public Safety (Discretionary Adds) $245.2 Million
Teacher Pay Annualize $60.3 Million
Judicial Pay $2.3 Million
Nurse Pay $13.1 Million
Revenue Compliance (Discretionary Adds) $52.2 Million
TOTAL $3.727 Billion

NON-DISCRETIONARY ADDS
K-12 Needs $2.728 Billion
Medicaid Deficits, Growth, FMAP Needs $2.730 Billion
Higher Education Needs $890.5 Million
Mental Health (Hospitals, DOJ Agreement) Needs $441.5 Million
Corrections Needs $219.6 Million
Human Service Needs $340.8 Million
Juvenile Justice Needs $53.8 Million
Other Non-Discretionary Needs $617.6 Million
Tenet Replace $92.3 Million
Other $2.9 Million

Non Discretion: Employee Benefits/Operations

Retirement Needs $1.319 Billion
SHBP/Regents Health Needs $286.7 Million
Administrative or Other Benefits Needs $112.9 Million
Cyber $1.6 Million
Rent $45,137 Thousand
TOTAL $1.723 Billion

Other State Funds (Lottery, Motor Fuel, Mortgage) $2.400 Billion

THE BOTTOM LINE

The final result is that of the net $8.3 Billion in new spending, the largest items of spending are Medicaid Deficits and Growth, $2.73 billion, and Education adds including PreK-12, $1.01 Billion, and K-12 needs, $2.728 Billion. Additionally Retirement obligations total $1.319 Billion. Just those four items above total $7.787 Billion of the increased spending.

The increase of $8.3 billion over 11 years represents only 2.6% of total spending. That's certainly not excessive in a period where the state grew at least 831,822 in population.

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