Friday, August 20, 2010

Friday Wrap Up: Interim Committee Meetings Update

The legislative interim committee schedule is now under way. 

Over the past two weeks there were several meetings of interest to our community. The first dealt with the state employee health plan and the benefits for hospital employees. The major announcement in each of these meetings was that the state health plan is going to be short at least $572 million for FY 2011-2012 budget.The second major discussion was if the current state health plan should apply for grandfather status as we transition into the new rules instituted by health care reform. Not holding on to grandfather status could increase the short fall for the health plan to over 1 billion dollars. 

Then on Monday, August 16, we received a budget update at the Child Fatality Task Force from Barry Boardman, Phd. fiscal research staff.

Here is the state of upcoming budget for fiscal year 2011.
The outlook for the next fiscal year is more drastic than this year. This is due to three different factors the first is the termination of stimulus dollars provided in this current budget. The second factor is the termination of the sales tax and corporate tax that was passed in the 2009 session. Third is the extremely slow economic recovery that our state is experiencing.

FY 2010-2011 budget had a 11% shortfall. In actuality it was closer to a 15% shortfall due to a significant reduction in revenue collection. In the coming biennial budget we will see a deficit of 3.2 billion. The deficit consists of 1.6 billion in stimulus money, 1.3 billion in sales tax revenue and the remainder of the deficit is created by 300 million in non-recurring cuts.

These figures do not include the $572 million deficit in the state health plan. Two year ago the budget was 20.8 billion, we are looking to create a budget for the upcoming biennial of 16 billion.

No comments: