Session Wrap-Up: 2014 Supplemental Budget Avoids Elephant in the Room
The 2014 Legislative Session concluded last week as scheduled with the passage of a supplemental budget that makes some changes to spending, while putting off larger decisions around education funding. While little progress was made to increase funding for education this year, it can’t be avoided in the next budget cycle.
The budget spends a net of $115 million above appropriations in the original 2013-15 budget. The majority of the spending increase ($89 million) addresses changes in caseloads, inflation, and other maintenance level adjustments that allow the same level of state services. The remaining $66 million reflects the balance of policy decisions that either increase or reduce state investments.
As the graph below shows, compared to original funding levels for the two-year budget period, services that help families achieve economic security are reduced by $82 million. The bulk of the reduction stems from fewer people receiving services that help them find and keep a job, known as Temporary Assistance to Needy Families (TANF). As we have explained previously, declines in TANF participation are not a sign of success, but rather a result of policy choices that have severely limited access to the program. Every other area of state investment is increased compared to original spending levels for the two-year budget period.
The largest single investment in the supplemental budget is $58 million for textbooks and supplies in K – 12 classrooms. While this addition in funding helps in meeting McCleary and fully funding basic education, it is a very small investment compared to the more than $4.5 billion that will ultimately be needed.
Outside of K-12, other state investments are made in education, include $25 million for scholarships for students pursuing a degree in a high demand field (Opportunity Scholarships), over $23 million in increased payments to early learning providers, and $5 million to provide financial aid to undocumented youth (DREAM Act). See chart for more details on specific budget decisions.
The elephant in the room is the significant increase in funding that will be required to fully fund basic education by 2018. In the next biennium, at least $2 billion more will be needed for the next installment towards meeting McCleary. Yet, projected revenues are expected to fall short of simply maintaining current investments. While this year lawmakers dodged the reality that new revenue will be needed, that truth will be inescapable next year.