The State of the
State Budget
A Presentation for the
DU Strategic Issues Program
Presented by Todd Saliman
Governor’s Office of State Planning and Budgeting, Director
August 12, 2010
(Revised September 2010)
1
Role
oeo
of the
eO
Office
ce o
of S
State
ae
Planning and Budgeting
„
On behalf
O
b h lf off th
the G
Governor, develop
d
l and
d submit
b it tto th
the annuall E
Executive
ti B
Branch
hb
budget
d t
request to the Legislature.
„
Develop and submit supplemental budget requests throughout the fiscal year.
„
Prepare
p
and implement
p
budget
g balancing
g actions when reserve falls below required
q
level.
„
Prepare quarterly economic forecasts that span four fiscal years.
„
Define and oversee the strategic planning process for all agencies.
„
Identifyy new efficiencies and savings.
g
„
Work with Legislature to implement budget request.
Governor's Office of State Planning and
Budgeting
2
Shifti and
Shifting
d Stretching
St t hi Dollars
D ll
„
Si
Since
2001
2001, th
the state’s
t t ’ b
budget
d th
has b
become iincreasingly
i l strained.
t i d
„
Implementation of repeated efficiency studies and audits has eliminated the major sources of
waste, fraud and abuse.
„
Transparency
p
y and accountability
y have g
greatly
y improved
p
„
As of July 2010, there are 25,877 state employees under the Governor’s purview. That is
361 fewer than October 2008, when the economic downturn began.
„
Nondiscretionary programs are receiving an increasing portion of the budget.
„
Today, 97% of the General Fund budget goes to just five service areas.
„
In most areas, funding for services is not keeping up with even the minimal growth rate upon
which TABOR was built.
„
Amendment 23 worked.
worked K
K-12
12 funding growth had been protected
protected, but now that is at risk too
too.
„
For years, state funding for higher education has not even provided increases for new
students.
„
Spending
p
g for p
prisons,, courts and p
public safety
y has g
grown more than most areas.
Governor's Office of State Planning and
Budgeting
3
Effi i
Efficiency
and
dA
Audits
dit
„
When Governor Bill Owens was elected in 1998, he implemented the New Century
Colorado Project to identify opportunities to improve Government efficiency and
eliminate waste, fraud and abuse.
„
When Governor Bill Ritter was elected in 2006
2006, he created the Government Efficiency
and Management (GEM) review also to identify opportunities to improve Government
efficiency and eliminate waste, fraud and abuse. The estimated benefit to the state of
this effort was $205 million.
„
Since 2000
Si
2000, the
th independent
i d
d t Office
Offi off th
the St
State
t A
Auditor
dit h
has conducted
d t dh
hundreds
d d off
independent audits that have resulted in thousands of recommendations to achieve
efficiencies, reduce waste and improve services. Historically, nearly all of the Auditor’s
recommendations are implemented by departments.
„
Every year, the State Departments, the Governor’s Office of State Planning and
Budgeting and the Joint Budget Committee identify new ways to save money and
operate more efficiently. These ideas are submitted to the Legislature through the
g Bill and are almost always
y approved.
pp
Long
Governor's Office of State Planning and
Budgeting
4
T
Transparency
and
d Accountability
A
t bilit
„
Online Budgets
…
„
Transparent Planning and Progress
…
„
Treasurer Cary Kennedy takes the lead in preparing this annual report which summarizes the state’s
finances This easy-to-read
finances.
easy to read summary is available online.
online
Colorado Tax Tracks
…
„
Websites for OSPB, the JBC and Legislative Council provide countless reports and summaries of the
state’s budget and revenues.
State Taxpayer Accountability Report (STAR)
…
„
The Governor implemented a more targeted strategic planning process for state departments. The
plans are posted on the OSPB website. These plans now include measurable, outcome based
performance objectives for the critical components of each department’s mission. Pursuant to HB 101119, these plans will also be analyzed annually by the Legislature.
Quality Analysis and Reporting
…
„
The OSPB website is now a repository of every department’s budget request.
This new interactive website from Treasurer Cary Kennedy provides detailed information on an
individual or family basis about how state tax dollars are used.
Transparency Online Project (TOP)
…
This effort puts all of Colorado’s revenues and expenditures online. This in-depth online resource
puts nearly every state government expenditure just a mouse click away.
Office of State Planning and Budgeting
5
S
Spending
di ffor E
Employees
l
„
„
Cost of State Employees
p y
…
In FY 2010-11 state employee salaries comprise 14% ($1.0 billion) of the state’s General Fund
operating budget.
…
If all state employee positions funded with General Fund had been eliminated in FY 2010-11
the state would have still had a budget shortfall
shortfall.
…
According to the Department of Personnel and Administration, state employee salaries are
3.9% below market median salaries (benchmarked against similar public and private
employees within Colorado).
C
Cost
off State
S
E
Employee
l
B
Benefits
fi
…
…
In FY 2010-11 state employee benefits comprise 1.6% ($109 million) of the state’s General
Fund budget.
„
$78 million is for Health, Life and Dental.
„
$17 million is for the employer share of PERA.
„
$13 million is from the employee share of PERA.
„
$1.2 million is for Short Term Disability.
According to the Department of Personnel and Administration
Administration, state employee benefits are
funded at 90% of market for health insurance, 85% of market for dental insurance and 72% of
market for life insurance
Governor's Office of State Planning and Budgeting
6
Tough Choices
„
97% of the FY 2010-11 General Fund appropriation is devoted to just five
areas of service:
…
45.6%, K-12 Education is the largest component of the General Fund budget
and was off limits when balancing in FY 2009
2009-10
10 due to a required 5% General
Fund increase.
…
17.7%, Health Care Policy and Financing provides services that are mostly
entitlement programs that have a counter-cyclical relationship with the economy.
When the economy goes down
down, Medicaid enrollments go up
up.
…
9.2%, Human Services are provided to the state’s most vulnerable and highestrisk populations such as those with developmental disabilities or mental illness,
juvenile delinquents, and children who are the victims of abuse and neglect.
…
15.2%, Corrections, Public Safety and Judicial provides public safety
services. Staffing levels that were reduced during the last recession have still
not been restored. Judicial staffing was increased pursuant to HB 07-1054.
…
9.3%, Higher Education is one of the last remaining areas of the budget where
there continues to be budgetary flexibility and where funding has been
temporarily maintained with federal stimulus funds.
Governor's Office of State Planning and
Budgeting
7
Budget Flexibility
„
During a budget presentation in August 2008
2008, OSPB estimated the
following regarding budget flexibility:
…
“Of the $18.6 billion budget, about $18.45 billion is obligated for ongoing
programs.”
…
“That means that there is real flexibility with only 0.7% of the total state budget.”
„
The above estimate would have translated into about $150 million of budget
flexibility.
„
That August 2008 estimate was based on a revenue forecast that predicted
revenue would support $7.8 billion in General Fund spending in FY 200809.
„
FY 2008-09
2008 09 General Fund appropriations ended up at $7
$7.5
5 billion
billion.
„
FY 2009-10 General Fund appropriations ended up at about $6.7 billion.
Office of State Planning and Budgeting
8
A
Appropriations
i ti
vs. P
Personall IIncome
In FY 1991-92, 3.97% of Coloradans’ personal income was spent on state services. In FY 2000-01 that
percentage dropped to 3.51%. Today, it is about 3.10%.
$9,000
$8,000
Millions
$7,000
$6,000
$5,000
$4,000
$3 000
$3,000
$2,000
General Fund Appropriations
GF Appropriations at 90-91 Personal Income Percent
GF Appropriations at 00-01 Personal Income Percent
Governor’s Office of State Planning and
Budgeting
9
Medicaid Enrollment Growing
Increase of 120% Over 11 Years
650,000
600,000
550,000
Enro
ollment
500,000
450,000
400,000
350,000
300,000
250,000
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
11-12
Fiscal Year
Governor's Office of State Planning and
Budgeting
10
St t ’ K-12
State’s
K 12 Sh
Share IIncreasing
i
70%
65%
60%
55%
50%
45%
40%
35%
30%
Fiscal Year
State Share
Local Share
Governor's Office of State Planning and
Budgeting
11
C
Corrections
ti
P
Population
l ti Ch
Changes
In 2007 it was estimated the state would need over 5,000 additional prison beds over the next five years. After
issuing over $1 billion of COPs to build the beds, the state would have had to pay over $90 million a year in COP
payments and about $300 million a year to operate the beds.
24,000
22,000
Prison Population
20,000
18,000
16,000
14 000
14,000
12,000
10,000
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
Fiscal Year
Governor's Office of State Planning and
Budgeting
12
I
Impact
t off Referendum
R f
d
C
„
Referendum C provided critical relief to the state.
…
The state retained $3.6 billion due to the passage of Referendum C during the five
year timeout.
…
Budgets are currently being cut due to the recession, but the passage of Ref. C
protected funding for critical services.
…
If Ref. C had not passed, today’s program cuts would have been taken from a
dramatically lower base and would have decimated programs like K-12 and higher
education.
…
Forecasts indicate that the state will not reach its TABOR limit for several years.
…
Extending
g Referendum C will become critical in the future but would not solve
funding shortfalls over the next few years.
Governor's Office of State Planning and
Budgeting
13
Education Department
All Funding Sources
$5,000
$4,500
$4,000
$3,500
Millions
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
00‐01
01‐02
02‐03
03‐04
GF
04‐05
05‐06
CF
CFE/RF
06‐07
07‐08
08‐09
09‐10
10‐11
FF
Governor's Office of State Planning and Budgeting
14
Education Department
General Fund
$3 500
$3,500
$3,000
$2,500
Millio
ons
$2,000
$1,500
$1,000
2,143 2,313 2,418 2,515 2,269 01‐02
02‐03
03‐04
04‐05
2,719 2,883 3,023 3,215 3,239 3,177 08‐09
09‐10
10‐11
$500
$0
00‐01
05‐06
06‐07
Governor's Office of State Planning and Budgeting
07‐08
15
Health Care Department
All Funding Sources
$5 000
$5,000
$4,500
$4,000
$3,500
Millions
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
00‐01
01‐02
02‐03
03‐04
GF
04‐05
05‐06
CF
CFE/RF
06‐07
07‐08
08‐09
09‐10
10‐11
FF
Governor's Office of State Planning and Budgeting
16
Health Care Department
General Fund
$1,800
$1,600
$1 400
$1,400
Million
ns
$1,200
$1,000
$800
$600
1 015
1,015 1,082 1,044 ,
01‐02
02‐03
1,240 1,281 03‐04
04‐05
1,366 1,380 1,482 1,579 1,150 1,232 $400
$200
$0
00‐01
05‐06
06‐07
Governor's Office of State Planning and Budgeting
07‐08
08‐09
09‐10
10‐11
17
Human Services Department
All Funding Sources
$2 500
$2,500
$2,000
Millions
$1,500
$1,000
$500
$0
00‐01
00
01
01‐02
01
02
02‐03
02
03
03‐04
03
04
GF
04‐05
04
05
05‐06
05
06
CF
CFE/RF
06‐07
06
07
07‐08
07
08
08‐09
08
09
09‐10
09
10
10‐11
10
11
FF
Governor's Office of State Planning and Budgeting
18
Human Services Department
General Fund
$800
$700
$600
Millio
ons
$500
$400
618 $300
498 493 469 459 00‐01
01‐02
02‐03
03‐04
485 506 04‐05
05‐06
649 680 652 640 09‐10
10‐11
$200
$100
$0
06‐07
Governor's Office of State Planning and Budgeting
07‐08
08‐09
19
Corrections Department
All Funding Sources
$800
$700
$600
M
Millions
$500
$400
$300
$200
$100
$0
00‐01
00
01
01‐02
01
02
02‐03
02
03
03‐04
03
04
04‐05
04
05
GF
CF
05‐06
05
06
CFE/RF
06‐07
06
07
07‐08
07
08
08‐09
08
09
09‐10
09
10
10‐11
10
11
FF
Governor's Office of State Planning and Budgeting
20
Corrections Department
General Fund
$700
$600
$500
Millio
ons
$400
625 $300
$200
581 455 469 424 442 00‐01
01‐02
02‐03
03‐04
497 647 642 566 536 $100
$0
04‐05
05‐06
06‐07
Governor's Office of State Planning and Budgeting
07‐08
08‐09
09‐10
10‐11
21
Judicial Department
All Funding Sources
$500
$450
$400
$350
Millions
$300
$250
$200
$150
$100
$50
$0
00‐01
00
01
01‐02
01
02
02‐03
02
03
03‐04
03
04
04‐05
04
05
GF
CF
05‐06
05
06
CFE/RF
06‐07
06
07
07‐08
07
08
08‐09
08
09
09‐10
09
10
10‐11
10
11
FF
Governor's Office of State Planning and Budgeting
22
Judicial Department
General Fund
$350
$300
$250
Millions
$200
$150
327 324 332 08‐09
09‐10
10‐11
300 265 $100
$
206 215 00‐01
01‐02
201 209 219 02‐03
03‐04
04‐05
237 $50
$0
05‐06
06‐07
Governor's Office of State Planning and Budgeting
07‐08
23
Public Safety Department
All Funding Sources
$300
$250
Millions
$200
$150
$100
$50
$0
00‐01
01‐02
02‐03
03‐04
04‐05
GF
CF
05‐06
CFE/RF
06‐07
07‐08
08‐09
09‐10
10‐11
FF
Governor's Office of State Planning and Budgeting
24
Public Safety Department
General Fund
$90
$80
$70
Million
ns
$60
$50
$40
68 $30
58 57 00‐01
01‐02
54 54 56 59 02‐03
03‐04
04‐05
05‐06
80 82 83 08‐09
09‐10
10‐11
73 $20
$10
$0
06‐07
Governor's Office of State Planning and Budgeting
07‐08
25
Higher Education Department
All Funding Sources
$3,500
$3,000
$2 500
$2,500
$2,000
$1,500
$1,000
$500
$0
00-01
01-02
02-03
03-04
04-05
GF
FF
05-06
CF
06-07
07-08
08-09
09-10
10-11
CFE/RF
Governor's Office of State Planning and Budgeting
26
Higher Education Department
General Fund
$800
$700
$600
Millio
ons
$500
$400
748 750 748 694 686 $300
591 588 662 636 645 429
429 $200
$100
$0
00‐01
01‐02
02‐03
03‐04
04‐05
05‐06
06‐07
Governor's Office of State Planning and Budgeting
07‐08
08‐09
09‐10
10‐11
27
All Governing Boards
General Fund
$12,000
General Fund Pe
er Resident Stud
dent
$10,000
$8,000
$6,469
FY 2000-01 General Fund Per
Resident Student
(adjusted for inflation)
$6,000
$4,000
$3,975
Actual General Fund Per
Resident Student
(includes ARRA)
$2 000
$2,000
$0
Governor's Office of State Planning and
Budgeting
28
All Governing Boards
Total Funds
Total Funds Per Student
$20,000
$15,000
$11,376
FY 2000-01 Total Funds Per
Student
(adjusted for inflation)
$10,000
$10,409
Actual Total Funds Per
Student
(includes ARRA)
$5,000
$0
Governor's Office of State Planning and
Budgeting
29
ARRA F
Funds
d ffor B
Budget
d tB
Balancing
l
i
Fiscal Year
FMAP
SFSF
Education Stabilization
F d
Fund
SFSF
Government Services
F d
Fund
Total
2008-09
$247,743,698
$150,676,055
$31,760,411
$430,180,164
2009-10
$418,933,984
$382,008,243
$96,757,419
$897,699,646
2010-11
$363,825,231
$89,194,099
$9,846,312
$462,865,642
$1,030,502,913
$621,878,397
$138,364,142
$1,790,745,452
Total
OSPB estimates from the summer of 2010 and are not based on the November 1, 2010 budget request.
Office of State Planning and Budgeting
Balancing the Budget
(updated 11/1/10)
„
„
The Governor’s FY 2011-12 budget totals $20.6 billion, including:
…
$7.6 billion General Fund
…
$6.3 billion Cash Funds
…
$5 1 billi
$5.1
billion F
Federal
d l Funds
F d
…
$1.5 billion Reappropriated Funds
With this FY 2011-12 balanced budget submission, shortfalls totaling over $5.2 billion
have been addressed over four fiscal years.
…
A shortfall of $0.8 billion was addressed in FY 2008-09.
…
A shortfall of $2.2 billion was addressed for FY 2009-10.
…
A shortfall of $1.5 billion was addressed for FY 2010-11.
…
„
This includes the $59.7 million balancing announced on August 23, 2010.
„
This includes the $261.7 million balancing plan announced on October 22, 2010.
A shortfall of $714.6 million is now being addressed through this plan.
„
The $714
$714.6
6 million shortfall does not include major avoided costs totaling $379
$379.4
4 million which were not
funded in this FY 2011-12 balanced budget request.
Office of State Planning and Budgeting
31