How Much is $800,000,000?
According to Steve Peoples‘ report in the Projo, Rhode Island needs $800,000,000 more in revenue than it expects to collect through fiscal year 2010, to provide 1) all of the services budgeted for in this fiscal year and 2) approximately the same level of spending in the next fiscal year.
To understand how big this number is in practical terms, suppose — as some advocates in Rhode Island would prefer — that the education and health and human services areas of the state’s general revenue spending were declared off-limits to any cuts. How much would have to be cut from what remains of the state budget, to make up an $800,000,000 shortfall by the end of FY2010?
Well, if every non-education non-health-and-human-services government function was completely shut down on January 1, 2009 and not reopened until June 1, with everyone furloghed, no payments made to the pension plan for the downtime, etc., and we assume that the resulting savings is half of the money budgeted for this year, only about 60% of the total amount needed would be saved. With more judiciously spaced cuts beginning in FY2010, a 40-50% reduction in the total size of non-education non-hhs government operations could make up the rest and, if made permanent, possibly keep the budget balanced going forward.
That’s the size of the problem we’re facing.
With all programs on the table, health and human services and education included, a 12%-15% cut in total annual general revenue spending is needed to balance the budget and maybe end the recurring shortfalls.
Here is the list of every major area where the state planned to spend more than $50,000,000 of general revenue this year…
|Elementary and Secondary Education||$931,218,471|
|Mental Health, Retardation and Hospitals||$219,361,864|
|Children, Youth and Families||$137,133,720|
These 8 areas account for 92% of all Rhode Island general revenue spending. It’s going to be difficult to reconcile an $800,000,000 shortfall without taking something from each of them.