Tag: State Budget Crisis

Have Budget Cuts Negatively Impacted the Public School System?

horvath

A complete answer to this question requires more than a couple hundred words and two charts. On a positive note, K-12 jobs are still being added and assessment scores are above the national norm.

Are jobs being added fast enough, i.e. do the number of new teachers match the increase in students? Are teachers being replaced by teacher aides? Are key administrators being replaced by less experienced and knowledgeable staff? Are deserving professionals not receiving appropriate merit increases? Do the number of employees translate into quality education?

Colorado K-12 public education employment has fared better than the U.S. for the past three years. A review of the 12-month rolling average shows that Colorado employment dropped off from mid-2010 to mid-2011, but has added jobs since. On the other hand, U.S. K-12 public education employment has declined since mid-2009. Undoubtedly many Coloradans may feel the situation could be improved, but it appears to be better than the national trend.

Another area to look at is assessment scores, in particular the National Assessment of Educational Progress (NAEP). NAEP scores show that Colorado 4th grade scores are in the top 18 states for Reading, Math, and Science. Colorado’s eighth grade scores are in the top 10 states for these same subject areas.

Do strong NAEP scores correlate to high graduation rates? Do they mean students won’t need remedial classes if they take college classes? Are they an indicator that students are being educated to perform basic skills in the workplace?

Based on these two data sets, it appears that Colorado is making an effort to staff their K-12 programs as best as possible and that performance, based on NAEP, is better than the national norm. Arguably, other statistics may show the need for improvement, but data in these two areas suggest that Colorado leaders are taking positive steps in a challenging economic environment to educate our youth.

For additional information on the Colorado go to https://cber.co/CBEReconomy.html.

©Copyright 2011 by CBER.

Colorado State Government Employment Bucks National Trend

horvath

Across the country, state governments are slashing budgets and cutting the size of their state workforce. That is not the case in Colorado.

State employment has two components: Higher Education and State Government. Over the past two years, cber.co has reported how the Higher Education workforce has grown for the past decade.

As can be seen in the chart below, Colorado State Government employment (excluding higher education) has reported steady growth since 2004. This is contrary to the trend for the aggregate total of all states.

What lies ahead for state workers? Are these increases justified? Will the Governor continue to add workers to his team over the next year as revenues increase? What makes Colorado different from other states? Will state jobs reliant on federal funding be trimmed as adjustments are made to the federal budget? If the state population increases by 80,000 to 100,000 people every year, won’t it be necessary to add state workers to provide essential services for them? Will the state experience a post recession drop off in workers, as was the case in 2002-2004? How will the elections impact the future of the size of Colorado’s government?

Two sources are recommended for tracking the fortunes of the Colorado State Government: the Governor’s Office of State Planning and Budgeting and the Colorado Legislative Council provide quarterly updates of the state economy and finances.

To learn more about the challenges facing government leaders across the country, read The Report of the State Budget Crisis Task Force. The report focuses on six states but illustrates problems that exist in Colorado.

For additional information on the Colorado go to https://cber.co/CBEReconomy.html.

©Copyright 2011 by CBER.

Great Recession Continues to Play Havoc with State Finances

horvath

The Great Recession has taken its toll on state and local governments. Three years after the end of the Great Recession state and local governments continue to face significant fiscal challenges. In mid-July The State Budget Crisis Task Force released a report headed up by Richard Ravitch and Paul Volcker that examined the challenges to financial stability for California, Illinois, New Jersey, New York, Texas, and Virginia. Just over 36% of the country’s population lives in these six states.

There are a number of variables (policies, economic structure, demographics, etc.) that differentiate the states; however, the report identified six fiscal threats common to each:
• Medicaid spending growth is reducing funds for other needs.
• Federal deficit reduction will result in lower funds for state coffers.
• Underfunded retirement accounts are a risk for future budgets
• Eroding tax bases and volatile tax revenues jeopardize state finances.
• Local government fiscal challenges may impact state budgets.
• State budget laws and practices hinder fiscal stability.

To show the seriousness of the problem the report evaluated changes in tax revenues generated from the peak-to-trough, the trough to 2011, and peak-to-2011. The changes in percentages are adjusted for inflation; however, they are not adjusted for policy changes. In some cases policy changes have been made that have or will positively impact revenues.

The change from peak-to-trough follows:
• U.S.  -12.0%
• California -14.9%
• Illinois  -18.7%
• New Jersey -17.2%
• New York    -4.3%
• Texas  -15.4%
• Virginia -15.9%

The change for the recovery, or trough-to-2011, follows:
• U.S.  +  5.7%
• California +11.9%
• Illinois  +12.9%
• New Jersey +  2.7%
• New York +  4.3%
• Texas  +  7.4%
• Virginia +  3.9%

The change from peak- to-2011, follows:
• U.S.  –  7.0%
• California –  4.8%
• Illinois  –  8.2%
• New Jersey -15.0%
• New York –  0.2%
• Texas  –  9.2%
• Virginia -12.6%

Colorado was not included in the report; however, the challenges faced by the state are similar. Data from the Colorado Legislative Council’s quarterly reports (June) show the following levels in the state’s gross general fund, expressed in billions:
• FY ending June 2008  $7.7
• FY ending June 2009 $6.7
• FY ending June 2010 $6.5
• FY ending June 2011 $7.1
• FY ending June 2012 $7.6
• FY ending June 2013 $7.8
• FY ending June 2014 $8.2

The Colorado data is not inflation adjusted. On an inflation-adjusted basis the level of the state General Fund will not return to the FY 2008 level until FY 2013 or 2014. The Colorado State Demography Office projects that the state population will increase from 4.9 to 5.4 million people for that period. In other words the state will add half a million people and have the same level of funding as five or six years ago.

It is truly a challenging time to be working in the public sector.

Links to the State Budget Crisis site and the Colorado Legislative Council site are:

 

 

©Copyright 2011 by CBER.