Budget Blog

September 11, 2020 - News Flash

By Brian Sigritz posted 09-11-2020 01:08 PM

  

Alabama

Alabama has committed $1.5 billion of the $1.8 billion received by the state from the federal CARES Act; allocations were made for education, health care, businesses, local governments, and agriculture, including timber owners. The state’s online sales tax has been a “financial vaccine” for counties and a “life saver” for municipalities, increasing 99 percent over fiscal 2019 collections. Legislators do not believe a special session will be needed prior to the next regular convening in February. The governor announced the proposed location of three new prisons that would be privately built but leased and operated by the state.

 

Alaska

Alaska’s Supreme Court ruled that the state’s plan to borrow as much as $1 billion to pay oil and gas tax credits owed to companies in the state is unconstitutional, meaning the state will need to find another way to pay $743 million for the subsidy program. Lawmakers unanimously approved changes to broaden eligibility for the state’s small business aid program supported by the coronavirus relief fund. The state was approved for the $300 weekly supplemental unemployment benefit under the federal Lost Wages Assistance program, though non-traditional workers who were receiving Pandemic Unemployment Assistance will be ineligible for the additional $300 in benefits.

 

Arizona

Arizona voters will consider this year whether to legalize recreational marijuana, after the state Supreme Court ruled that the measure can stay on the November ballot; if legalized, taxes on recreational marijuana could generate $250 million to $300 million in state revenue. Voters will also decide in November whether to increase taxes on high-income earners to support K-12 education funding. State officials warn that the $300 supplement to unemployment benefits, known as the “lost wages assistance” paid through a Federal Emergency Management Agency (FEMA) grant, may expire soon once funding runs out.

 

Arkansas

Arkansas’ general revenue tax collections in August increased by $56.9 million, or 11.2 percent, over the prior year and exceeded the April forecast by 10.6 percent. The state applied to the federal government for an additional $300 in weekly unemployment insurance benefits. A state panel overseeing allocation of federal CARES Act funds approved a $20 million request from the state education department to create COVID-19 emergency leave for school employees. The state received a $21 million federal grant to expand substance abuse treatment programs and reduce opioid deaths.

 

California

California received funding assistance from the Federal Emergency Management Agency for fire suppression costs. A complex proposal to extend an existing fee on utility customers to generate $3 billion for wildfire and climate change funding failed to advance before the legislative session adjourned. The legislature did pass a bill that phases out the state’s juvenile prison system, whereby funding will instead flow to counties to house and treat juvenile offenders in their own communities. The governor signed several bills intended to aid small businesses, including measures to ensure coronavirus loan funds that are forgiven are not taxable, accelerate the use of bond funds, and offer tax credits to small businesses that hire new or laid-off workers.

 

Colorado

Colorado voters will consider 11 measures on the ballot this November, including one to repeal the Gallagher Amendment to prevent a substantial decline in property tax revenues, another to cut the state’s income tax rate, one to create a tax on vaping and other nicotine products, one to create a statewide paid leave program, and one to require voters to approve new state fee-based programs. The governor set up a $32 million fund using money from the Governor’s Emergency Education Relief Fund under the federal CARES Act, which public schools and universities can apply for grants from to address learning challenges related to COVID-19 impacts; school districts can also apply for $2 million in coronavirus relief funds to increase access to remote learning.


Connecticut
Connecticut is projecting a $2.1 billion operating deficit for fiscal 2021, 10.3 percent of the general fund, reflecting anticipated costs of the coronavirus response and expected revenue losses. The budget reserve fund is estimated at nearly $3.09 billion at the close of fiscal 2020, or 15.4 percent of fiscal 2021 net general fund appropriations. The state’s special transportation fund is estimated to end 2021 with a $76 million deficit. The administration directed agencies to find ways to cut spending by 10 percent or more in the next two fiscal years and will prepare agencies for the potential retirement of thousands of employees within the next two years.

 

Delaware

Delaware’s governor signed an executive order creating the Delaware Resilience Fund Program to assist families and communities devastated by tornadoes and other severe weather. The state is investing $20 million in CARES Act funding to expand rural wireless broadband coverage and improve access among low income families. Officials are trying to increase the state's Census response rate of 62 percent, which is currently below the national average of 65 percent. Schools across the state have reopened, with some starting the year virtually.

 

 

Florida

Florida revenues are projected to drop $3.4 billion below estimates in fiscal year 2021 and another $2 billion in fiscal year 2022, according to the state’s Revenue Estimating Conference. The estimates show that the $5.8 billion in federal CARES Act funds are keeping the state from running a deficit but note uncertainty on how the funds can be spent. The state will begin paying an additional $300 in weekly unemployment insurance benefits following federal approval. The governor vetoed a bill banning the sale of nearly all flavored e-cigarette products and increasing the smoking age from 18 to 21.


Georgia

Georgia sold $1.1 billion in bonds for construction, equipment, and repair projects across the state, with the largest portion going for K-12, university and technical college projects. Despite the economic downturn caused by the pandemic, the state has retained most of the $2.8 billion in savings built up by the beginning of 2020. The governor established a task force on COVID-19 vaccine distribution following the federal government’s directive to states for a rollout by November 1. The governor announced an $80 million allocation for K-12 and college programs from the CARES Act Governor’s Emergency Education Relief Fund to fund internet connectivity, student support services and online courses.

 

Hawaii

Hawaii’s governor included furloughs in the administration’s new financial plan, which estimates 10 percent labor cost savings from fiscal years 2021 to 2024, which translates to one unpaid day every two weeks. The state’s revenue council forecasts fiscal 2021 revenues to decline 11 percent year-over-year. The governor announced his intent to veto six measures, including one related to CARES Act funding. The state will spend $10 million from coronavirus relief funds on retraining and workforce development programs for agriculture, health care and technology in an effort to diversity the state’s tourism-heavy economy. A new independent state agency will take over responsibility for public school construction for the statewide school district.

 

Idaho

Idaho tax revenues continue to beat projections, but the governor warned that it is early in the fiscal year and they do not know how long this revenue performance will continue. The state is facing pressure to restore budget cuts, particularly to education. State board of education officials approved a temporary change to allow schools to use enrollment numbers instead of average daily attendance numbers to calculate state funding, due to some students learning remotely during the pandemic. The state superintendent released a $2 billion general fund budget request for public schools for fiscal 2022, representing a 1.5 percent increase over originally approved levels for fiscal 2021.

 

Illinois

Illinois’ governor has called on the federal government to provide additional aid to states, and said that social services may be diminished if Congress does not take action. Counties in the state have increased hiring for contact tracers following the state providing financial aid to local health departments. A decline in tourism taxes are considered a credit negative, according to one rating agency. Some road projects may be delayed until 2021 due to lower-than-anticipated gas tax revenues. Eighty-seven percent of municipalities in the state are facing a revenue shortfall, according to a recent survey.

 

Indiana

Indiana’s State Board of Education approved a fix to ensure that all school districts will receive full student funding for virtual education. FEMA approved a grant for Indiana residents to receive $300 in supplemental unemployment insurance. The state is also expected to apply for a federal loan to help unemployment aid. Indiana is opening 100 new community testing sites, and is providing $19 million in matching grants for school safety. Earlier the state provided $61 million in grants to help with remote learning.

 

Iowa

Iowa has currently spent $2.81 billion of an awarded $4.26 billion in federal coronavirus aid, with the largest amount going to unemployment assistance. $100 million in federal funds will help support the state’s testing capacity. The president signed an emergency declaration to help Iowa respond to property and crop damage from an August storm; earlier the governor noted that the state needs at least $4 billion in aid. Some local officials have warned about layoffs without additional federal aid.

 

Kansas

Kansas opened applications for a second round of CARES Act funding for economic relief. The governor has also called for some CARES Act funds to be used to purchase drop boxes for mail-in ballots. The head of the Kansas’ foster care system said the state has made progress following previous challenges. Earlier the governor announced that she was reinstating a moratorium on evictions and foreclosures. The governor, along with other officials, renewed their call for Medicaid expansion in the state.

 

Kentucky

Kentucky’s governor said the state may have a $1.1 billion shortfall in fiscal 2021, about 10  percent of its discretionary budget; he has asked all state agencies and universities to prepare for an 8 percent budget cut. The governor announced at least $15 million in CARES Act funds will be available for rental assistance to prevent evictions. In addition, Kentucky is utilizing CARES Act funding to raise Lost Wages Assistance provided by the federal government to enhance jobless claims from $300 per week to $400 per week. The state has also renewed a contract to address its backlog in jobless claims.

Louisiana

Louisiana was among the first four states to be approved for the Lost Wages Assistance program funding. The state is being awarded a $42 million five-year federal grant to improve reading skills for 67,000 disadvantaged public school students. The governor announced Louisiana will strive to reach a “net zero” level of greenhouse gas emissions by 2050. The governor also signed two executive orders; one created a task force that, by February 2022, will recommend strategies, policies, and incentives aimed at meeting an interim goal of a 26-28  percent reduction by 2025, a 40-50  percent reduction by 2030, and reductions resulting a “net zero” impact by 2050. The House Speaker said that the state should expect a special session this fall to address an anticipated midyear budget shortfall.

Maine

Maine’s governor issued an executive order moving the deadline from September 1 to October 19 for agencies to submit plans about how to reduce spending in the state’s next two-year budget. The state is facing an estimated revenue shortfall of more than $520 million in the current fiscal year and $1.3 billion over the next three years. The governor’s three-part plan would reduce spending by about $256 million, avoid deep program cuts and laying off state workers, use $97 million in federal funding for authorized public health and safety programs, and transfer $70 million in increased  liquor sales tax receipts to the general fund. Many employers say they plan to continue remote work at least through the end of the year.

 

Maryland
Maryland closed fiscal year 2020 with tax collections down $102.2 million, or 0.5 percent, from pre-pandemic estimates; the general fund collected $18.6 billion, or 2.4 percent above the prior year, and ended the year with a balance of $585.8 million. The state received federal approval to begin paying an additional $300 in weekly unemployment insurance benefits. The state transit administration proposed scaling back local bus, commuter bus, and commuter rail service as fares dropped during the pandemic. The state received more than $2.4 million in federal funding to help combat unemployment insurance fraud during the pandemic.


Massachusetts
 
Massachusetts’ August revenue collections, adjusted for revenues recorded in fiscal 2020, totaled  $1.979 billion, or 0.4 percent less than the prior year. Gambling generated about $45 million in revenue including about $13.2 million for state revenues in July as facilities began to reopen. The Secretary of State said that more funds will be need for mail-in voting, while the education commissioner has called for more funds to help needy students. The governor has called on the federal government to reach a sustainable solution for unemployment assistance.

 

Michigan
Michigan’s governor signed a bill to designate $2.8 billion in Federal Emergency Management Agency dollars for unemployment assistance. The governor has said that Michigan will not soften its coronavirus response until there is a vaccine, and has called for the president to fully fund the National Guard. Online sales tax revenue in the state increased $140 million between April and July compared to last year. The state recently revised its revenue forecast up from May, but it was still below January; the budget director noted that the state is still looking at a significant revenue loss. Michigan reached a $600 million settlement with residents impacted by the Flint water crisis.

 

Minnesota

Minnesota’s governor called the legislature back for a fourth special session regarding use of his emergency powers in responding to COVID-19. Revenues in July were higher than forecast, however, the state is still forecasting a $4.7 billion budget deficit. The state is providing free COVID-19 saliva tests for teachers and child care workers. Minnesota received federal approval for an additional $300 in weekly unemployment benefits. The Department of Corrections is facing a $14 million shortfall and has announced plans to close two small correctional facilities. The Department of Human Services has begun making cuts to direct care and treatment programs to close a budget hole.

 

Mississippi

Mississippi legislators approved a compromise budget for the Department of Marine Resources following disagreements over control of Gulf restoration funds the state receives from oil and gas leases. The state received federal approval to pay out an additional $300 in weekly unemployment insurance benefits to eligible residents. Advocates are renewing a push for Medicaid expansion in the state, following successes in other states to expand the program via ballot measures.

 

Missouri
Missouri’s Senate recently passed five special session bills dealing with crime. The state is resuming free COVID-19 testing in hard hit areas. Local election officials have said that they need additional funding to protect voters and poll workers. The state has begun paying $300 unemployment supplements for the time being. The governor has defended the role of a consulting firm in helping to coordinate the state’s pandemic response.

 

Montana

Montana’s governor released a wide-ranging plan to address climate change by adopting energy efficiency standards, promoting innovation, and other strategies, while saying he does not support a carbon tax. The governor transferred $46.7 million to the state’s fire suppression account, using surplus funds available from fiscal 2020. The state announced last month that it would offer $400 in supplemental weekly unemployment benefits under the federal Lost Wages Assistance program, with $100 coming from the state’s coronavirus relief fund allocation. Montana launched a new working capital loan program for businesses that have experienced revenue loss due to COVID-19, also using coronavirus relief funds.

 

Nebraska

Nebraska’s legislature completed its 2020 session and passed bills on property tax relief, business incentives, a University of Nebraska medical project, parole eligibility, and youth rehabilitation and treatment. Several groups in the state are calling for a special session to address police practices, criminal justice and related issues. The University of Nebraska-Lincoln is planning to cut $18.9 million in positions as part of addressing a $38.2 million budget gap. The state Supreme Court is considering arguments regarding an initiative to legalize casino gambling at horse racetracks.

 

Nevada

Nevada’s Board of Examiners approved reductions to four public works contracts to help balance the state general fund budget, while approving $13.2 million in federal CARES Act funds for COVID-19 testing, outreach, and monitoring for teachers. State funding for roads and public transit is facing long-term challenges due to the pandemic’s impact on sales taxes, passenger fares, and gas taxes, and the regional transit commission has already cut services and employee pay, and reduced its workforce by 15 percent. Nevada’s higher education system will distribute $79.4 million in one-time funds from reserves to colleges and universities to partially offset budget cuts.

 

New Hampshire
New Hampshire’s governor announced that about $16 million will be spent on rural broadband projects statewide from the CARES Act with a total of $50 million to be set aside for the state’s broadband projects. The state plans to use $4.6 million of the funds from the national Volkswagen settlement for electric vehicle fast-charging stations out of the total $31 million settlement funds. The state is planning rapid testing of students for COVID-19. New Hampshire has been working to create a streamlined process for workers receiving an additional $300 in weekly unemployment benefits.

 

New Jersey

New Jersey’s governor proposed a $40.1 billion revised fiscal 2021 budget that projects $36.4 billion in revenue on a 12-month basis, includes $1.02 billion in proposed revenue-raising measures and additionally recommends $4 billion in emergency borrowing. The revised budget proposal preserves core state programs and would end the year with a $2.2 billion surplus. Legislative analysts are projecting revenues of $37.8 billion through the end of June, about $1.4 billion more than the Treasury's estimate of $36.4 billion. The state is planning on using $250 million in federal coronavirus aid for childcare. The legislature also approved $130 million for nursing homes. The governor plans to sign an environmental justice bill.

 

New Mexico

New Mexico’s governor has asked agencies to cut spending again by 5 percent for fiscal 2022 in their budget requests and to leave most vacant positions unfilled, as the state faces a possible $990 million deficit for fiscal 2022. The governor is calling for the state to retain investments in early childhood education despite falling revenues. Medicaid enrollment in the state has increased nearly 7 percent since the onset of COVID-19. The administration has also determined how to distribute $100 million in federal coronavirus relief funds to localities, after receiving applications from local governments for $192 million in aid.

 

New York
New York’s first quarterly financial plan update projects a $14.5 billion general fund revenue decline and a 15.3 percent all fund tax receipts decline for fiscal 2021 from the budget forecast released in February, creating a total loss of $62 billion through fiscal 2024 as a direct consequence of the COVID-19 pandemic. The governor remains resistant to increase taxes on the wealthy to address the state’s budget gap. The state comptroller said that governments’ employer contributions for most workers in the state pension system will rise to 16.2 percent of their payroll from 14.6 percent for the 2021-22 fiscal year. A new state law requires private employers to provide at least 40 hours of sick leave each year to all their workers, including part-timers.


North Carolina
North Carolina’s governor said he would sign a plan to spend $1.1 billion of the state’s remaining COVID-19 relief funds, funding direct cash payments to families, a $50 increase in weekly unemployment benefits and additional testing, tracing, and personal protective equipment. The governor released a budget proposal that addressed coronavirus relief funds and adjustments for fiscal year 2021, including additional teacher bonuses, Medicaid expansion, and over $5 billion in proposed new debt for capital projects and infrastructure. A state court ruled that outstanding financial obligations, including restitution or fees, cannot prevent convicted felons from voting if they have completed all other portions of their sentence.


North Dakota

North Dakota’s Emergency Commission approved another $50 million in aid for businesses; the aid still requires approval by the legislature’s budget section. The state Land Board pushed back the deadline for gas royalty payments. The state has also started a program to plug abandoned oil fields. Oil and gas tax revenues are currently below forecast with a new revenue forecast expected in September.

 

Ohio

Ohio’s Senate passed a bill to provide $650 million in CARES Act funds to local governments. The state’s Medicaid program is hoping to make telehealth options permanent beyond the COVOD-19 pandemic. Roughly 48,000 Ohioans are being asked to repay overpaid unemployment benefits. Casinos and racinos set an August record for gambling revenue following three months of closures. Schools across the state are spending additional funds on COVID-19 precautions.

 

Oklahoma 

Oklahoma’s casino exclusivity fee revenues were down nearly 34 percent during the first six months of 2020 compared to the prior year, driven by closures due to the pandemic; the fees generated $148.2 million in fiscal year 2019. The department of tourism began charging parking fees at state parks to address a maintenance backlog which are projected to generate $10 million annually. The state submitted an application to the federal government for the additional $300 weekly unemployment insurance benefit. The state is spending $1.9 million to provide community-based services to 270 individuals with intellectual and developmental disabilities on a waiting list.

 

Oregon

Oregon lawmakers last month in special session approved $400 million in spending cuts – roughly 3 percent of general and lottery fund spending for fiscal 2021, with more severe budget cuts expected in the next biennial budget cycle, when the state is expected to bring in $4 billion less than previously projected. The Oregon Health Authority is drawing up scenarios for what a 20 percent budget cut would look like for the fiscal 2022-2023 biennium. The state applied and was approved for an extra $300 in weekly unemployment benefits under the federal Lost Wages Assistance program.

Pennsylvania
Pennsylvania collected $2.5 billion in general fund revenue in August, which was $209 million, or 8.9 percent, more than anticipated with general fund collections through August totaling $6.7 billion, which is $210.3 million, or 3.3 percent, above estimate. The state noted that August tax collections were still seeing the impact of extending the tax deadline. The governor is asking state legislators to legalize recreational marijuana to help generate tax revenue to support small businesses and to fund restorative justice programs. Nearly 7,000 childcare centers across the state will split $117 million in CARES Act relief representing the third round of funding since the pandemic began in March.

Rhode Island
Rhode Island budget officials are directing state department heads to submit fiscal year 2021-2022 budget proposals with 15 percent cuts across the board, citing uncertainty over federal aid and a prolonged shortfall of revenue amid the pandemic, with department heads expected to submit their budget proposals to the governor by October 1. The budget office has partnered with Brown University to identify cuts through the lens of evidence-based budgeting. Three public colleges are facing budget shortfalls leading to reductions in staff, hiring freezes, and cuts to the salaries of top administrators. Some local officials have expressed opposition to a proposal to cut an aid program for distressed communities.

South Carolina
South Carolina economists reduced estimated revenue collections for fiscal year 2021 by $52 million and estimated lawmakers would have an additional $86 million in recurring revenues to spend, instead of the more than $800 million in pre-pandemic estimates. With the state operating on a continuing resolution, the Senate began work on a fiscal year 2021 budget including consideration of $40 million in teacher raises and $1,000 in hazard pay bonuses for certain state workers; the governor urged lawmakers to copy and paste last year’s spending plan and asked agencies to prepare for possible cuts. The state applied to the federal government for the additional $300 weekly unemployment insurance benefit. The transportation department lost $49 million in gas tax fees so far this year with more people working from home.


South Dakota

South Dakota’s governor has called for making $400 million in CARES Act funds available for businesses in the state, and providing $500 per student in additional money for schools  The state is also using $5 million in federal coronavirus aid for a tourism ad campaign. The legislature is planning to seek public input for spending the remaining amount of CARES Act funds.

 

Tennessee

Tennessee began distributing the additional $300 in weekly unemployment insurance benefits following approval of a three-week, $236 million grant from the federal government; the state filed its first extension application for an additional week of funding. The state is allowing schools to give food assistance payment cards directly to qualifying families under the federal Pandemic Electronic Benefits Transfer program. The governor urged businesses to take advantage of an expanded relief program to help offset COVID-19 losses after an additional $83.5 million was added to the original $200 million allocation. The state is investing $61 million from federal coronavirus relief funds in broadband expansion.

 

Texas

Texas sales tax collections declined by 5.6 percent in August compared to the prior year while general-purpose revenues for the fiscal year (which ended August 31) totaled $57 billion, which is above the revised estimate of $55.8 billion but 1.5 percent lower than last year. The state has $15 million to spend on an advertising campaign to increase the state’s Census response rate before field collection activities end. The state’s additional $300 weekly unemployment insurance benefit is set to expire after the state received initial funding for claims. State agencies prepared plans for implementing 5 percent spending reductions following direction from state leaders.

 

Utah
Utah’s governor signed more than a dozen bills following a special session, including a bill allocating the state’s remaining coronavirus relief funding. Lawmakers on an interim committee are working on a proposal to issue bonds for $500 million to fund transportation projects. The state board of education added more funding to extend a competitive grant program to expand internet access to more students learning remotely during the pandemic.

 

Vermont 
Vermont’s governor submitted a revised proposed budget for fiscal 2021 totaling $1.7 billion for the general fund with the legislature returning in August to address the revised full-year budget proposal. House lawmakers have crafted a budget that includes roughly $24 million in ‘bridge funding’ for the state college system. The governor proposed a $133 million economic relief package intended to provide additional funding for industries during the COVID-19 pandemic. The governor has also proposed an aid program for undocumented immigrants. The state has made significant progress in building a new system of childcare hubs to serve school-age children on remote learning days and planned to use $12 million in federal Covid-19 relief toward building out childcare capacity for children in grades K-6.


Virginia
Virginia’s general fund revenue collections decreased 0.2 percent in August compared to the prior year while September receipts will provide a clearer assessment of fiscal year 2021 trends. School funding was reduced by $95.2 million this fiscal year due to declining sales tax revenue. The governor announced the creation of a $4 million fund to help low-income individuals facing eviction by providing counsel to those who cannot afford it. Legislators are meeting in special session to reconsider the biennial budget, criminal justice and COVID-19 measures after the governor projected a $2.7 billion revenue shortfall.


Washington

Washington state is providing nearly $100 million in rental assistance using federal coronavirus relief funds, which will be passed through county governments to distribute to organizations with a history of providing rental assistance. Facing an $8.8 billion decline in tax revenues relative to projections through fiscal 2023, the governor has already taken cost-cutting actions such as furloughs and cancelled pay increases, but it is uncertain when further budget adjustments will be made. The governor issued a proclamation saying that school districts can use transportation funds for delivering education materials, meals and technology.

 

West Virginia

West Virginia’s August tax collections exceeded estimates by 12.1 percent, a decrease of 1.4 percent from the previous year. In the second month of fiscal 2021, year-to-date tax collections are 11 percent ahead of estimates. Personal and corporate income tax collections benefitted from the filing deadline move from April 15 to July 15, and consumer spending also exceeded estimates and last year’s tax collections. Severance tax on coal and natural gas, however, were 31 percent below the estimate and 86 percent below August 2019 collections. West Virginia is utilizing CARES Act funding to raise Lost Wages Assistance provided by the federal government to enhance jobless claims from $300 per week to $400 per week. CARES Act funding and the Emergency Food Assistance Program are providing $24 million to combat food insecurity in the state. The governor provided $2.8 million in grants from the Governor’s Contingency Fund to support fairs, festivals, symphonies, orchestras, theatres, and organizations.

 

Wisconsin
Wisconsin’s governor has asked FEMA to reconsider what kind of COVID-19 spending will be reimbursed, including not covering personal protective equipment for schools. The governor announced an additional $30 million in CARES Act funds will go to early care and education providers. The state was approved by the federal government to provide an additional $300 million a week in unemployment assistance. The Board of Regents approved a budget request calling for additional state aid, a new program to cover tuition of lower-income families, and borrowing up to $1 billion to help cover losses due to COVID-19. The legislature failed to take action on a series of policing reform bills. Tax collections for fiscal 2020 were less than estimated in January, but more than the amount budgeted for the year.

 

Wyoming 

Wyoming’s governor released details on the state’s first round of budget cuts totaling more than $250 million – or $361 million when including cuts to maintenance and matching federal funds – which includes 274 eliminated positions, most of which were vacant but involving some layoffs as well. The state department of health will see an $89 million reduction in general funds, along with $28 million in federal matching funds. Agencies have already submitted preliminary proposals for another round of 10 percent cuts, to be unveiled in early fall. The state’s K-12 system faces a $500 million revenue shortfall, but has yet to see budget cuts, since the governor lacks explicit authority to cut education without legislative approval.