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News
Auditor:
Budget
Exceeds Legal Spending Limit
Posted 11 February
2010
State Auditor David A. Vaudt has completed his review of the Governor’s
proposed Fiscal Year 2011 budget. Vaudt said, “Not only does this
proposed budget continue to follow the poor budgeting practices of past
years, it is the first budget I’ve reviewed that exceeds the statutory
99% expenditure limitation.”
While the Governor’s budget proposal claims to be more than $60 million
under the 99% expenditure limitation required by law, the numbers on
which this claim is based do not withstand scrutiny. The budget relies
on $341 million in “savings” to be produced by implementing the
recommendations of a report authored by Public Works LLC, a consulting
firm hired by the Governor to identify savings in state government.
After studying the consultant’s
report and the Legislative Services Agency’s (LSA’s) analysis of many
of the report’s recommendations, Vaudt agreed with LSA’s conclusion the
General Fund savings will be far less than the $341 million included in
the Governor’s budget proposal. Even if all of the consultant’s
recommendations were implemented, $83 million—almost 25%— of the
Governor’s $341 million projected General Fund savings will not be
realized because several of the savings amounts included by the
Governor have no impact on the General Fund.
This results in the proposed budget being $25 million above, not $60
million below, the expenditure limitation—meaning the Governor’s
proposed budget for Fiscal Year 2011 does not comply with state
law. Furthermore, the feasibility and timing of some of the other
savings included by the Governor are questionable. For example, the
consultant recommended the State modernize unclaimed property search
capabilities and projected first year revenues would be $40 million. As
Auditor Vaudt has already communicated, these assets belong to
taxpayers and must be returned to them instead of being retained by the
State to fund its programs. In addition, the consultant’s specific
strategy has yet to be successfully implemented by any other state we
are aware of, and legal hurdles could impact the amount and feasibility
of any revenues in Fiscal Year 2011.
Auditor Vaudt identified two other concerns regarding the Governor’s
budget proposal. First, the budget for the current fiscal year was
balanced via furloughs and “mandatory unpaid leave” days—a short-term
fix for a long-term problem. Under LSA’s analysis, without at least $13
million of additional funding for union employees, plus millions more
for non-contract employees, these unpaid leave and furlough days will
need to be repeated in Fiscal Year 2011. Second, the proposed
budget does not fund $86 million of General Fund salary increases
negotiated as a result of collective bargaining. Without funding for
increased salary costs or concessions in Fiscal Year 2011, additional
layoffs and/or “mandatory unpaid leave” will need to occur.
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