The State Budget Outlook

The three year outlook on revenues coming into the state budget predicts a drop in excess of $700 million to around $5.2 billion by 2013. This puts us back to 2004 levels.

Starting around 2000, the budget saw revenues hit the $5 billion mark. This number held steady until 2005 when we saw a spike in income that pushed revenues to almost $7 billion by 2007. This spike mirrored the economic bubble that we saw in the national economy. When the economic bubble burst, so did the bubble in our state revenues.

Expenditures from the state budget flows to the following areas:

  • 38.6% – K-12 Education
  • 24.53% – Health & Social Rehabilitation
  • 12.56% – Higher Education
  • 8.74% – Public Safety & Corrections

Note that over 50% goes to some form of education. Over 75% goes to either education or health services.

Since we have a balanced budget requirement and cannot borrow to fund government programs, it is numerically impossible to avoid cutting these services without raising taxes – an action that we cannot afford to do in this damaged economy.

This puts our state’s programs in the same position that our state’s businesses and individuals have been facing over the past two years – a position that requires them to evaluate the efficiencies of their services, eliminate non-essential services and labor and work harder.

If you are interested in the growth of state government, the following shows rates for several decades –

  • 7.5% – 1980 to 1990
  • 4.3% – 1990 to 2000
  • 0.2% – 2000 to 2010

And interestingly –

  • 6.2% – 2002 to 2007
  • -8.6% – 2007 to 2010

Going back to 1979, we have never seen the volatility in state budget revenues that we have witnessed over the last five years. This volatility resulted from shifting the tax base from property tax to sales tax in the mid-2000’s  and then having the economy slump which resulted in a drop in sales tax.

I have received many calls from teachers who are concerned about being furloughed for five days. I have received many calls and visits from the parents of special needs children who rely upon our state health services. I am expecting to receive the budget draft next week for review. I will know then exactly what is being proposed.

Looking toward the future, once we get through this crisis, we must reform the operation of our state agencies and stabilize our sources of revenue.



The Subversive Organizations Registration Act

Recently, the Secretary of State put a form on his website for “subversive” organizations to register. This action was prompted by a state law dating back to the 1950’s that was passed during the height of the communist threat during the Cold War.I received a few calls from citizens who were concerned that this was a new law that might be aimed at the growing number of citizens who are protesting the operation of both state and federal government.

I reviewd the bill and noted that it also required foreign controlled companies who received any direct or indirect assistence from their home governments to register also. For example, if BMW received a loan from the German government, then they would need to register under the subversive organizations act.

Though this act has never been enforced, I introduced a bill that would repeal it entirely.

The Ludwig Bill

After the well publicized accident caused by John Ludwig last year, I introduced a bill that would require police officer’s to offer a breathalyzer test to any driver that caused a fatality – something that Ludwig did not take. Currently, it is at the police officer’s discretion.

Unfortunately, this bill was voted down unanimously in sub-committee yesterday. Since all of the members of the sub-committee are lawyers, I wonder if that made a difference.