March 28, 2013
The state cut funds formerly provided to schools, libraries and local governments in the last budget.
Table 2 shows that the net loss in fiscal years 2012-13 compared to the previous biennium was nearly $800 million. In the proposed budget the losses continue, deepened with the final elimination of the estate tax – local governments will see $647.8 million less over the two-year period of the proposed budget.
Anticipated growth of state GRF tax revenues, of which local governments get 1.68 percent through the Local Government Fund (LGF), will drive small increases in LGF monies in fiscal year 2014 compared to the prior year ($15.6 million, or 4.5 percent), and again in fiscal year 2015 compared to fiscal year 2014 (12.8 million or 3.5 percent). When the two-year appropriation in the current budget is compared to the proposed budget, however, it becomes clear that local governments are actually getting $202 million less over the coming biennium. Tax reimbursements also continue to drop. Casino revenues and the broadened sales tax base will not make up for these cuts. By the end of the coming biennium, local governments will have lost nearly half of state revenue sharing, even with new sources taken into account.Executive summary Introduction Expenditures Medicaid expansion Other health and human services K-12 education Higher education Tax policy Conclusion