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News
Auditor: Budget Exceeds Legal Spending Limit
Posted 11 February 2010
State Auditor David A. Vaudt has completed his review of the Governor’s proposed Fiscal Year 2011 budget. Vaudt said, “Not only does this proposed budget continue to follow the poor budgeting practices of past years, it is the first budget I’ve reviewed that exceeds the statutory 99% expenditure limitation.”

While the Governor’s budget proposal claims to be more than $60 million under the 99% expenditure limitation required by law, the numbers on which this claim is based do not withstand scrutiny. The budget relies on $341 million in “savings” to be produced by implementing the recommendations of a report authored by Public Works LLC, a consulting firm hired by the Governor to identify savings in state government. After studying the consultant’s
report and the Legislative Services Agency’s (LSA’s) analysis of many of the report’s recommendations, Vaudt agreed with LSA’s conclusion the General Fund savings will be far less than the $341 million included in the Governor’s budget proposal.  Even if all of the consultant’s recommendations were implemented, $83 million—almost 25%— of the Governor’s $341 million projected General Fund savings will not be realized because several of the savings amounts included by the Governor have no impact on the General Fund.

This results in the proposed budget being $25 million above, not $60 million below, the expenditure limitation—meaning the Governor’s proposed budget for Fiscal Year 2011 does not comply with state law.  Furthermore, the feasibility and timing of some of the other savings included by the Governor are questionable. For example, the consultant recommended the State modernize unclaimed property search capabilities and projected first year revenues would be $40 million. As Auditor Vaudt has already communicated, these assets belong to taxpayers and must be returned to them instead of being retained by the State to fund its programs. In addition, the consultant’s specific strategy has yet to be successfully implemented by any other state we are aware of, and legal hurdles could impact the amount and feasibility of any revenues in Fiscal Year 2011.

Auditor Vaudt identified two other concerns regarding the Governor’s budget proposal. First, the budget for the current fiscal year was balanced via furloughs and “mandatory unpaid leave” days—a short-term fix for a long-term problem. Under LSA’s analysis, without at least $13 million of additional funding for union employees, plus millions more for non-contract employees, these unpaid leave and furlough days will need to be repeated in Fiscal Year 2011.  Second, the proposed budget does not fund $86 million of General Fund salary increases negotiated as a result of collective bargaining. Without funding for increased salary costs or concessions in Fiscal Year 2011, additional layoffs and/or “mandatory unpaid leave” will need to occur.


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