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State Funds Still Well Below Pre-Recession Levels

March 11th, 2011

As state leaders prepare to enact the state budget for Fiscal Year (FY) 2012, the rapid and steep decline in state funds due to the recent recession seems to be slowing. With the help of continued reliance on one-time funding sources, the ARRA cliff caused by the end of federal fiscal stimulus funds is not going to be as deep as it could have been for FY 2012.

However, the state support budget is still well below pre-recession levels. The table below shows state support funds (including the general fund and other state discretionary funds) and ARRA fiscal stimulus funds that are treated as state source funds for FY 2008 through FY 2011 and recommended levels for FY 2012.

Click to enlarge

State Support Budget (including ARRA funds) FY 2008-2012*

State-Support-Budget-with-ARRA-Funds
Recommended funds for the FY 2012 budget year are over $250 million less than state support funds in FY 2008. The effect of this decline is even steeper when you consider the increases in the need for and cost of state services.

So far, the decline in state funds has been addressed with year-after-year budget cuts for state services and use of one-time money to prop up the state budget. The repeated budget cuts are affecting the quality of state services and are threatening the state’s economic recovery. A balanced approach that includes sustainable, new revenue is needed to salvage the state’s investment in its people and its economic competitiveness.

*Illustrates the recommended state support funding levels from the Governor. The Joint Legislative Budget Committee Recommendation is $5,417,000,000.

Source:

Executive Budget Recommendation Fiscal Year (FY) 2012

Sara Miller

 

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