Kudos to state legislators for reaching a final budget agreement. We can all agree that this was no small task. It must be pointed out, however, that in order to make the budget balance the plan includes $156 million more in recurring spending than it does recurring revenues.
2009 could turn out to be an extremely difficult year for state budget-writers. Approximately $500 million in new revenue is needed each year to pay for growth in the continuation budget (the amount needed to maintain current quantity and quality of services). On top of that the state will have to begin making payments on the additional $857 million in new state debt. On top of that they will need to find the money to continue some of the nonrecurring spending items such as ABC school bonuses and dropout prevention grants. Then on top of that they will need to come up with $156 million to fix the hole they've left in this year's budget.
The budget may pass today and be signed by the Governor but we will be living with the consequences for some time to come.