Thus ends fiscal year 2011. Hello 2012!
The 2011 fiscal year ended at midnight last night, and 2012 begins today. Governors rushed to sign budgets into law as the clock struck twelve. The drama in the state capitols must have been at a fever pitch. Here are a few vignettes.
Illinois is the big mess
The state will end the old fiscal year with $8.3 billion in unpaid bills and other obligations, including $850 million owed in corporate tax refunds, $750 million needed to repay interfund borrowing, and $1.2 billion for state employee health insurance, according to estimates by the Illinois Comptroller’s Office on Thursday.
The state also owes primary and secondary school districts $1.13 billion and universities $584 million, according to the comptroller’s office.
A package of bills that would have let Illinois issue $6.2 billion of seven-year general obligation bonds to pay bills failed to gain support in the Legislature. Quinn had originally pushed for selling $8.75 billion of 15-year bonds to pay bills.
Without any bonds, the $8.3 billion of fiscal 2011 bills and obligations will have to be paid off by the end of December with fiscal 2012 revenue, exacerbating the state’s structural deficit.
Minnesota shuts down
Minnesota state government shut down at 12:01 a.m. today after a colossal failure by Gov. Mark Dayton and the Republican-controlled Legislature to reach agreement on a budget for the next two years.
The shutdown means more than 20,000 state employees have been laid off. State parks and highway rest stops are closed. Highway construction projects halted and thousands of workers are off the job.
Most state offices are closed and won’t reopen until Dayton and the lawmakers finally cut a deal on taxes and spending.
Two hours before the midnight deadline, Dayton announced that despite an “intense week of negotiations,” he deeply regretted he and the GOP lawmakers had “failed to bridge the divide between us.”
The gap was over taxes. The Republicans refused to accept any tax increases, insisting the state not spend “one penny more” than the $34 billion it is projected to collect over the next two years.
Nastiness in New Jersey
At a news conference to unveil the cuts he made with line-item vetoes, Christie blasted the Democratic budget as “unconstitutional” and based on “fantasy revenue found between the cushions.”
“They decided to deceive the citizens of the state with a budget that makes them look like Santa Claus in an election year,” Christie said. “How shocking, politicians deceiving and pandering to voters to get re-elected.”
Christie had one explanation for his individual reductions: “We can’t afford it.”
Democrats, who Christie said were “pandering to special interests” are expected to return next week and fight the reductions.
“There are special interests,” Senate President Stephen Sweeney (D-Gloucester) responded. “They are called seniors, the middle class and low-income families who the governor just decimated. We are just beginning to digest the cuts in the budget, but they are extremely cruel and mean-spirited.”
On Tuesday, Sweeney stood smiling next to Christie as the governor signed a sweeping overhaul of employee pensions and health benefits. Thursday, Sweeney stood in the back of the room at the governor’s Statehouse news conference with a somber look, later calling it the “most disappointing day in my entire career as a legislator.”
“He makes it very hard to work with him,” Sweeney said.
Pennsylvania Governor signs budget minutes before midnight
PennLive.com reports that in Pennsylvania the Governor signed a bill that had no votes from Democrats.
With about 15 minutes to spare before the July 1 start of the new fiscal year, Gov. Tom Corbett put pen to paper and signed his name on the first state budget of his five-and-a-half-month-old administration. The plan calls for spending $27.15 billion in the 2011-12 fiscal year.
In a public signing ceremony in the Capitol Rotunda, Corbett, surrounded by smiling GOP lawmakers, enacted the budget and fulfilled his promise of getting a budget done on time, albeit with only minutes to spare.
The GOP-crafted plan passed the House and Senate but without a single Democratic vote in either chamber earlier this week.
In a debate Thursday on cuts in aid to public schools, Rep. Mike Sturla, D-Lancaster, challenged Republicans to tout this budget back in their hometowns.
“Own your cuts,” Sturla scoffed. “Have a parade and say: ‘I cut your school district and I’m proud of it. Good for me.'”
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