November 10, 2010 AASBO Bi-Monthly Meeting Legislative and Budget Update By Chuck Essigs

“Even if you are on the right track, you will get run over if you just sit there. – Will Rogers If you are going through hell, keep going. – Winston Churchill Friendship is what gets you through the bad times and helps you enjoy the good times.

Election Results House ◦ 40 Republicans ◦ 20 Democrats Senate ◦ 21 Republicans ◦ 9 Democrats

Election Results 30 Legislative Districts ◦ 19 Legislative Districts  Republican Senator + 2 Republican Representatives ◦ 9 Legislative Districts  Democratic Senator + 2 Democratic Representatives ◦ 2 Legislative Districts  Republican Senator + 1 Republican and 1 Democratic Representative

Legislative Leaders House Speaker – Kirk Adams Senate President – Russell Pearce

Propositions Proposition Number DescriptionPass or Fail Prop 106Health Care ChoicePassed Prop 107Preferential Treatment of Discrimination Prohibition Passed Prop 109Right to Hunt and FishFailed Prop 110State Trust LandsFailing Prop 111Lieutenant GovernorFailed Prop 112Initiative Filing DeadlineFailing Prop 113Secret Ballot for Union Election Passed Prop 203Medical MarijuanaFailing Prop 301Growing Smarter Fund SweepFailed – 74% No Votes Prop 302First Things First Fund SweepFailed – 69% No Votes

Historical Perspective Made to look darker No need to make darker now

Budget Shortfalls FY2011$800 to $900 million (Includes Prop 301 and Prop 302) FY2012$1.4 billion

General Fund Spending FY2011 K-12 Education37% Medicaid29% Higher Ed11% Prisons11% State Workers5% Debt Service3% Other4% Total100%

FY11 Share of Cuts - Formula AreaShare of $900 Million K-12 Education (37%)$333 Million Medicaid (29%)$261 Million Higher Education (11%)$99 Million Prisons (11%)$99 Million State Workers (5%)$45 Million Debt Service (3%)$27 Million Other (4%)$26 Million Total$900 Million

FY12 Share of Cuts - Formula AreaShare of $1.4 Billion K-12 Education$518 Million Medicaid$406 Million Higher Education$154 Million 14.5% Reduction in FY12 Starting Budget Over a 10% Reduction in the base level

Additional Issues For FY11 ◦ K-12 Education and Higher Ed have federal MOE protection Cutting Medicaid means loss of federal dollars ($7 billion) Debt Service Obligations

Funding Already Suspended – FY11 Soft Capital$165 Million New Utility Formula$100 Million Building Renewal$231 Million Charter School Additional Assistance$10 Million Total$506 Million

Example – K-12 Reduction for FY12 Proportional Share - $518 Million 14.5% Reduction in State Dollars 10% Reduction in Base Level

Solutions Rollovers Fund Sweeps Asset Sales Cuts

If Like Me, You Are Wondering If You Should Be Working At Some Other Job... After Hearing This Presentation, You May Want To Think About It Again.