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Financial Team Suggests 2011 Budget Increase

With revenue projections for fiscal year 2011 now higher than expected, members of the governor’s financial team came to the Senate Tuesday with amendments that would, if approved, adjust the proposed General Fund budget upward from $781.9 million to $826.7 million.
The uptick is associated with corresponding jumps in tax collections, according to Office of Management and Budget Director Debra Gottlieb. Her office’s numbers showed a decrease in individual income taxes, but increases in corporate income taxes and gross receipts taxes, along with trade and excise tax collections. Also factored in is $92.5 million in projected real property taxes and $27.1 million in federal state fiscal stabilization funds, she said.
More than $100 million in bond proceeds — part of a $400 million bond issue being used to pay off some of the government’s borrowed debt, cover most of the $150 million shortfall projected for this year and free up some more cash for FY 2011 — further factor into the total, along with millions more in federal funds.
The extra wiggle room allows for proposed budget increases for: Justice, Licensing and Consumer Affairs, Health, Internal Revenue Bureau and Education, which, in many cases, restores funding for many of the vacant positions cut out of the departments’ budgets to save money. New appropriations — including capital projects, contractual expenses and contributions to the General Fund — have also been factored in, among other things.
Most notably, Gottlieb said, the government is also restoring the level of employer contributions to the Government Employees’ Retirement System to 17.5 percent.
The financial team’s presentation before the Appropriations and Budget Committee traditionally wraps up the summer budget season, leaving senators with a better idea of what they’re working with over the last couple months of the current fiscal year and what priority spending areas they should take into consideration as a new one approaches.
For FY 2010, the picture is a lot less rosy, with a higher-than-expected appropriation level yielding a $36.3 million deficit. When the financial team appeared before the committee in June, Gottlieb said appropriations totaled $862.3 million, which she said during Tuesday’s meeting has now jumped to $869.7 million.
"As a result, there are $36.3 million of current year appropriations that will probably lapse without being allotted because of the current revenue situation," she said. Some new appropriations recently passed by senators have added to the total, while drops in a few projected revenue categories — such as federal state stabilization funds — have widened the gap.
Gottlieb said that about $56 million in federal state stabilization funds were anticipated to come in for FY 2010, but at this point, that figure looks to be about $29.8 million, with the remainder factored instead into the FY 2011 total.
Senators usually spend at least a few weeks in markup, making adjustments as they see fit, but interestingly, a good chunk of the budget bills are scheduled for a first go-around next week. If approved by the Budget Committee, the bills then go on to Rules, then the full Senate before they can make their way to the governor’s desk.
Present during Tuesday’s meeting were Sens. Craig W. Barshinger, Carlton "Ital" Dowe, Louis P. Hill, Neville James, Wayne James, Terrence "Positive" Nelson, Samuel Sanes and Patrick Simeon Sprauve.

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With revenue projections for fiscal year 2011 now higher than expected, members of the governor's financial team came to the Senate Tuesday with amendments that would, if approved, adjust the proposed General Fund budget upward from $781.9 million to $826.7 million.
The uptick is associated with corresponding jumps in tax collections, according to Office of Management and Budget Director Debra Gottlieb. Her office's numbers showed a decrease in individual income taxes, but increases in corporate income taxes and gross receipts taxes, along with trade and excise tax collections. Also factored in is $92.5 million in projected real property taxes and $27.1 million in federal state fiscal stabilization funds, she said.
More than $100 million in bond proceeds -- part of a $400 million bond issue being used to pay off some of the government's borrowed debt, cover most of the $150 million shortfall projected for this year and free up some more cash for FY 2011 -- further factor into the total, along with millions more in federal funds.
The extra wiggle room allows for proposed budget increases for: Justice, Licensing and Consumer Affairs, Health, Internal Revenue Bureau and Education, which, in many cases, restores funding for many of the vacant positions cut out of the departments' budgets to save money. New appropriations -- including capital projects, contractual expenses and contributions to the General Fund -- have also been factored in, among other things.
Most notably, Gottlieb said, the government is also restoring the level of employer contributions to the Government Employees' Retirement System to 17.5 percent.
The financial team's presentation before the Appropriations and Budget Committee traditionally wraps up the summer budget season, leaving senators with a better idea of what they're working with over the last couple months of the current fiscal year and what priority spending areas they should take into consideration as a new one approaches.
For FY 2010, the picture is a lot less rosy, with a higher-than-expected appropriation level yielding a $36.3 million deficit. When the financial team appeared before the committee in June, Gottlieb said appropriations totaled $862.3 million, which she said during Tuesday's meeting has now jumped to $869.7 million.
"As a result, there are $36.3 million of current year appropriations that will probably lapse without being allotted because of the current revenue situation," she said. Some new appropriations recently passed by senators have added to the total, while drops in a few projected revenue categories -- such as federal state stabilization funds -- have widened the gap.
Gottlieb said that about $56 million in federal state stabilization funds were anticipated to come in for FY 2010, but at this point, that figure looks to be about $29.8 million, with the remainder factored instead into the FY 2011 total.
Senators usually spend at least a few weeks in markup, making adjustments as they see fit, but interestingly, a good chunk of the budget bills are scheduled for a first go-around next week. If approved by the Budget Committee, the bills then go on to Rules, then the full Senate before they can make their way to the governor's desk.
Present during Tuesday's meeting were Sens. Craig W. Barshinger, Carlton "Ital" Dowe, Louis P. Hill, Neville James, Wayne James, Terrence "Positive" Nelson, Samuel Sanes and Patrick Simeon Sprauve.