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$700M needed for FY14 and FY15?
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Last week, we looked at agencies’ proposed requests for additional funding in the amended fiscal year 2014 budget and the general FY15 budget. Of course, these amounts are subject to the governor’s review through the Office of Planning and Budget in preparation for his two budget presentations in early January 2014.

Last week, we reviewed the following projections of budget needs:

                  FY14 Ameded             FY15   
Medicaid        $73 million       $158 million

ERS, PSERS                           $130 million

This week we look at K-12 education, the Board of Regents and Technical School Systems and behavioral health, which complete the major cost-drivers in the two budgets. Other departments very likely will make a case for additional funds for various reasons, but the major categories covered in these two columns outline the top budget areas that the state is either bound or committed to at some level.

K-12 Education
FY14 amended needs: $100 million (est.)
FY15 general needs: $140 million (est.)

In K-12 education, official figures have not been released for what their needs will be for the rest of FY14 and FY15. Based on past data, we anticipate a request of $100 million for enrollment growth in the FY14 amended budget. Equalization, step increases and enrollment growth will probably require $140 million the general budget.

University System and Technical Schools
FY15 general proposals: $53.8 million

The University System funding formula is based on enrollment statistics from two years prior. During that time frame, enrollment dropped to the extent that the formula would generate $20 million less than currently appropriated. However other requests from Regents have been submitted.

First is a request for $20.6 million in funds for additional maintenance and operations for 180,000 additional square feet that have been added across the system. Health and insurance benefits, compliance with the Affordable Care Act (ACA) in the separate Regents Health Plan and increases to the optional retirement plan make up almost $45 million in requested funds. Finally, the system would like to increase medical residences by $3.2 million.

Technical colleges (TCSG) have submitted a second request totaling $5.4 million to cover growth funding and their needs for maintenance and operations for new buildings.

Behavioral Health
FY15 general request: $46 million

The settlement agreement with the U.S. Department of Justice requires that the next phase of improvements to our mental health system be implemented at a cost of $28 million. Included will be funds for mobile crisis teams, case managers, housing subsidies, transportation funding and other services to help those under care live more independent lives. The replacement of one time funds and other deficits that have arisen total another $18 million requested for the FY15 general.

These numbers are certainly not complete nor do they complete the work necessary to prepare either budget, but they do give some idea of the funds being requested.

In this document, we have outlined about $173 million needed for the FY14 amended budget. For the FY15 general budget, we have totaled approximately some $527 million in entitlement and formula requirements and other obligations.

The good news is that monthly revenue growth appears to support the Amended needs and year to date revenue totals are in the 4-5 percent range which would support the above expenditures.

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