The Conference budget relies heavily on revenue from the American Recovery and Reinvestment Act (ARRA). This federal stimulus law provides significant aid to states to reduce the budget cuts they would be required to make in response to the national recession. The Conference Report uses about $1.5 billion of this money to help close the $5 billion gap. Had those new federal dollars not been available, the state would have had to have cut services even more deeply, or raised taxes more. In addition to the long-term benefits of not cutting more deeply into important investments, such as those in education and preventive healthcare, the ability of states to use the ARRA funds to reduce budget cuts can help to reverse the downward spiral of the national economy. Public spending by state government is important for stimulating economic activity at a time when such stimulus is clearly needed. The reliance on this aid, and on over $200 million from the State’s Stabilization (“Rainy Day”) Fund, also means, however, that the state continues to face serious structural budget problems and will have to make additional hard choices in the years to come.
Specifically on education, here's the bad news: By and large, the Conference Committee report adopts the lower funding level when choosing between the House and Senate recommendations.
- Chapter 70 is down by 2% per community (the proposed Senate level)
- We're getting to foundation only through stimulus funding ($167.6 million)
- adopts the lower inflation number of 3.04% in calculating foundation (which leads to a lower foundation number)
- funds the special ed circuit breaker at $88.9 million less than the FY 2009 budget; this will mean less money coming from the state in special education funding
- extended learning grants are down by $1.8 million from the FY 2009 budget
- kindergarten grants down by $7 million from the FY 2009 budget