Last week Mitch Bean, the terrific Director of the House Fiscal Agency, did a presentation to our Leadership Council on the state budget. I highly recommend taking a look at in detail. For most readers it will be new news. Certainly a far different story than you are getting from candidates or the press. In the presentation Mitch goes through how we got to today’s chronic structural deficit, what the outlook is for next year’s General Fund, School Aid Fund and Transportation Fund budgets and what the realistic options are for getting to structural balance.
The basic story is a decade or more of tax cuts – most of them tax expenditures – combined with rising health care and corrections costs none of which have been offset with enough structural spending cuts. The result a budget deficit next year projected at $1.6 billion and more than $1.4 billion in annual tax cuts on the books to be phased in by 2014. Quite sobering!
To get out of the mess will involve the Governor and Legislature making hard choices all of which will get people angry. There are no easy options. And to make matters worse, the process will repeat itself year after year after year if we don’t both redesign our tax system so that revenues grow with the state’s economy and slow the growth of health care expenditures.