The table to the right compares the solutions used in each of the three budgets released in the last week. Each uses new revenue, deep cuts, and balance transfers, and each assumes substantial federal funding.

Transfers and changes

All three budgets propose using the Rainy Day Fund as well as making transfers from other funds into the General Fund. The Governor proposes the highest amount of transfers.

New revenue

The Governor’s proposal is described at this link and the Senate proposal at this link.

Both the Governor’s proposal and the Senate proposal include a legislative fixes for the “Dot Foods case” and would increase the cigarette tax by one dollar per pack. Additionally, both proposals would eliminate wasteful tax exemptions, though the Senate’s approach targets a larger array of costly loopholes. Items included only in the Governor’s approach include increasing the Hazardous Substance Tax, implementing new taxes on bottled water and carbonated beverages, and extending the sales tax to purchases of candy and gum. On the other hand, the Senate proposed a temporary 0.3 percentage point increase in the state sales tax while funding the Working Families Tax Rebate at five percent of the federal EITC.

Federal funding

All three budgets assume that the enhanced health care funding provided as part of the federal recovery act will be extended for an additional six months. The Governor assumes this will provide $435; the House and Senate assume it will provide $483 million. The Senate and House both assume $86-87 million for the “Medicare Part D Clawback” as well as additional sources of federal aid. The House budget assumes that the federal government will grant a waiver allowing the state to use federal money to finance portions of Basic Health and a program for adults who are temporarily unable to work due to a physical or mental disability (GA-U).

Cuts

All three budgets propose deep cuts in core public services. For example: All three cut spending on higher education; All three suspend voter-approved funding to reduce class sizes in early grades and improve student achievement; The Governor’s budget and the Senate budget both sharply curtail temporary financial and medical assistance through GA-U for people who are unable to work due to disability; Both the Governor’s budget and the House budget make deeps cuts to child care assistance for working families.

Ending fund balance

All three budgets propose modest ending fund balances. The Governor and the Senate both provide ending fund balances that are large enough to absorb the loss if hoped-for federal money does not materialize. The House budget would move into the red if federal funding did not materialize.