What Does the Revenue Buy?

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What Does the Revenue Buy?

By - April 12, 2010

While the budget agreement expected to pass tonight still contains $755-$840 million in cuts, it stands in stark contrast to the Governor’s first budget proposal (“Book One”) from four months ago.* It takes a more balanced approach. By using federal funding and increased revenue, it avoids some of the deepest cuts proposed in Book One.

While it’s impossible to say exactly what the budget agreement would look like without the $757 million in increased general fund revenue, a comparison to Book One gives us a pretty good idea. The following lists cuts that were proposed in Book One but are not included in the current budget agreement. They add up to about $750 million, just under the amount of revenue assumed in the budget agreement. They provide an illustration of the benefits our state will receive because of the revenue increases.

Education and Opportunity

The Governor’s Book One budget proposed the following:

  • Eliminating state-funded early learning opportunities for 1,500 three year-olds from lower income families
  • Suspending a program that provides resources to property-poor school districts
  • Eliminating funds to help schools reduce class sizes in early grades
  • Eliminating funding for full-day kindergarten in schools with high poverty rates
  • Eliminating enhanced funding that serves 23,000 highly capable students
  • Eliminating financial aid (State Need Grant) for 12,300 students and significantly reducing aid for remaining recipients
  • Shifting higher education preventative maintenance expenses to capital funds

These cuts totaled $555 million. The budget avoids all of them with the exception of a $30 million reduction in early grade class size reduction (compared to a $111 million cut in Book One).

Healthy People

The Governor’s Book One budget proposed the following:

  • Suspending the following services for lower-income adults: non-emergent dental, hospice, physical, occupational, and speech therapy, interpreters, vision, hearing, podiatry, and Medicare Part D copays
  • Suspending maternity support services for women with at-risk pregnancies
  • Eliminating grants for community health centers
  • Eliminating health care coverage for 16,000 lower income children
  • Suspending school-based Medicaid services
  • Eliminating housekeeping and off-site laundry services to thousands of long-term care clients and people with developmental disabilities
  • Cutting state contribution to home care worker health insurance in half
  • Suspending most funding for Senior Citizens Services Act programs
  • Eliminating Medicaid Personal Care services for 1,400 elderly clients and people with developmental disabilities
  • Limiting eligibility for assistance to families caring for a loved one with developmental disabilities and reducing benefits by 25 percent

These cuts would have totaled $147 million. The budget agreement avoids all of them.

Economic Security

The Governor’s Book One budget proposed sharply restricting eligibility for child care assistance for lower income working families. This cut would have equaled $89 million. By comparison, the budget agreement cuts $11 million from child care.

*The difference between Senate W&M and the House OPR estimates is largely around the treatment of the Opportunity Pathways Account.