November 10, 2010 November 10, 2010 AASBO Bi-Monthly MeetingAASBO Bi-Monthly Meeting

Legislative and Budget Legislative and Budget UpdateUpdate

By Chuck Essigs

“Even if you are on the right track, you will get run over if you just sit there. – Will Rogers

If you are going through hell, keep going. – Winston Churchill

Friendship is what gets you through the bad times and helps you enjoy the good times.

Election ResultsElection ResultsHouse

◦40 Republicans◦20 Democrats

Senate◦21 Republicans◦9 Democrats

Election ResultsElection Results30 Legislative Districts

◦19 Legislative Districts Republican Senator + 2 Republican

Representatives

◦9 Legislative Districts Democratic Senator + 2 Democratic

Representatives

◦2 Legislative Districts Republican Senator + 1 Republican and 1

Democratic Representative

Legislative LeadersLegislative Leaders

House Speaker – Kirk Adams

Senate President – Russell Pearce

Propositions Propositions Proposition Number

Description Pass or Fail

Prop 106 Health Care Choice Passed

Prop 107 Preferential Treatment of Discrimination Prohibition

Passed

Prop 109 Right to Hunt and Fish Failed

Prop 110 State Trust Lands Failing

Prop 111 Lieutenant Governor Failed

Prop 112 Initiative Filing Deadline Failing

Prop 113 Secret Ballot for Union Election

Passed

Prop 203 Medical Marijuana Failing

Prop 301 Growing Smarter Fund Sweep

Failed – 74% No Votes

Prop 302 First Things First Fund Sweep

Failed – 69% No Votes

Historical PerspectiveHistorical PerspectiveMade to look darker

No need to make darker now

Budget ShortfallsBudget ShortfallsFY2011 $800 to $900

million(Includes Prop 301

and Prop 302)

FY2012 $1.4 billion

General Fund Spending General Fund Spending FY2011FY2011K-12 Education 37%Medicaid 29%Higher Ed 11%Prisons 11%State Workers 5%Debt Service 3%Other 4% Total 100%

FY11 Share of Cuts - FY11 Share of Cuts - FormulaFormula

Area Share of $900 Million

K-12 Education (37%) $333 Million

Medicaid (29%) $261 Million

Higher Education (11%) $99 Million

Prisons (11%) $99 Million

State Workers (5%) $45 Million

Debt Service (3%) $27 Million

Other (4%) $26 Million

Total $900 Million

FY12 Share of Cuts - FY12 Share of Cuts - FormulaFormulaArea Share of $1.4 Billion

K-12 Education $518 Million

Medicaid $406 Million

Higher Education $154 Million

14.5% Reduction in FY12 Starting Budget

Over a 10% Reduction in the base level

Additional IssuesAdditional IssuesFor FY11

◦K-12 Education and Higher Ed have federal MOE protection

Cutting Medicaid means loss of federal dollars ($7 billion)

Debt Service Obligations

Funding Already Suspended Funding Already Suspended – FY11– FY11Soft Capital $165 MillionNew Utility Formula $100 MillionBuilding Renewal $231 MillionCharter School

Additional Assistance $10 MillionTotal $506 Million

Example – K-12 Reduction Example – K-12 Reduction for FY12for FY12Proportional Share - $518 Million

14.5% Reduction in State Dollars

10% Reduction in Base Level

SolutionsSolutionsRollovers

Fund Sweeps

Asset Sales

Cuts

If Like Me, You Are If Like Me, You Are Wondering If You Should Wondering If You Should

Be Working At Some Be Working At Some Other Job. . .Other Job. . .

After Hearing This After Hearing This Presentation, You May Presentation, You May Want To Think About It Want To Think About It

Again.Again.