By Dave Anderson:
Quite a few states begin their fiscal year on July 1. Those states, including Pennsylvania and California are supposed to have FY-2011 budgets passed before the start of the fiscal year. However the states are experiencing significant revenue shortfalls and massive uncertainty on federal policy regarding Medicaid reimbursement rates so quite a few states will engage in budget silliness to either pass unrealistic but nominally balanced budgets or to delay the decision making process.
California is preparing to pay almost all state workers minimum wage for the month of July if a budget is not passed:
Gov. Arnold Schwarzenegger plans to cut the pay of state workers to minimum wage if a timely budget accord is not reached, according to a memo sent Wednesday from the director of the governor's Department of Personnel Administration to state agency and department heads.
The memo, written by DPA director Debbie Endsley, also warned that Schwarzenegger could order more controversial furloughs, even though the state's final scheduled furlough day for tens of thousands of employees was last Friday.
Pennsylvania is seeking to pass a budget on time. However that budget seems to rely on federal money that may not come through thanks to the Blue Dogs scoring an own goal of budget deficit peacockery instead of supporting effective counter-cyclical spending. The Allentown Morning Call has some details:
"After a late-night meeting of legislative leaders, the budget gap between Senate Republicans and House Democrats had shrunk to less than $400 million, lawmakers said.
A meeting that began after 9:30 p.m. featured a brief review of a line-item version of the House Democratic $28.169 billion proposal. Senate Republican leaders said they would prepare a counter-offer that would be submitted, along with the House Democratic proposal, for discussion at noon Thursday with Gov. Ed Rendell.
The budget is hanging on increased federal Medicaid funding that may or may not be there:
Lawmakers are still trying to figure out whether the state will receive $850 million in federal Medicaid Assistance money from Washington. Congress still hasn�t reached an agreement on the cash, which plays a key role in balancing the spending plan. Rendell has warned of mass lay-offs if Congress fails to come through.
Regardless of whether Washington approves the assistance or not, the state �needs a budget that accounts for that money,� Senate President Pro Tempore Joe Scarnati, R-Jefferson, said.
So the Pennsylvania budget may be done in time, but it is counting on money that may not be there to balance the budget. This is probably one of the simpler tricks that many states will attempt to pull to get their budgets done.
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