As more tax revenue reports roll in, projections for the state budget hole continue to worsen.
planned spending. The cuts announced Thursday provide $1.1 billion toward
filling that hole. She is banking on another $900 million from the federal
government that will go primarily toward Medicaid.
The $2 billion estimate is up from $1.6 billion just a couple of months ago. And that is not even counting the $300 million hole in the state health plan.
But don't shed a tear for legislators and bureaucrats as they scramble to make "cuts" in order to balance the budget. Consider the following:
- State budget-makers began receiving warnings last January that the economy's downturn would have a negative impact on revenues. In spite of such warnings, when they crafted the current year budget they: put no money aside into the rainy day fund, raided nine different trust funds for $60 million dollars to finance their spending increases and authorized an historic $857 in non voter-approved debt.
- The state budget increased at an average annual rate of 8.6 percent over the previous four years.
- Growing state revenues created more than $3 billion in combined surpluses for FY 2006 through FY 2008, yet rainy day reserves sit at only about $860 million.
- Since FY 2004, the state has authorized more than $3 billion in new debt spending. As a result, debt service requirements in the current (FY 2008-09) budget is 2 1/2 times more than just seven years ago.
Of course, why spend responsibly when DC will just bail you out when times get tough?