The Changing Shape of State Spending. A presentation by Carolyn Bourdeaux to the Southern Legislative Conference on September 25, 2012.  Click here […

Bourdeaux, Carolyn

English

Georgia State University

The Changing Shape of State
Spending

ScholarWorks @ Georgia State University

Georgia State University ScholarWorks @ Georgia State University CSLF Working Papers Center for State and Local Finance 9-25-2012 The Changing Shape of State Spending Carolyn Bourdeaux Georgia State University Follow this and additional works at: https://scholarworks.gsu.edu/ays_cslf_workingpapers Recommended Citation Bourdeaux, Carolyn, "The Changing Shape of State Spending" (2012). CSLF Working Papers. 49. https://scholarworks.gsu.edu/ays_cslf_workingpapers/49 This Article is brought to you for free and open access by the Center for State and Local Finance at ScholarWorks @ Georgia State University. It has been accepted for inclusion in CSLF Working Papers by an authorized administrator of ScholarWorks @ Georgia State University. For more information, please contact scholarworks@gsu.edu. 1The Changing Shape of State SpendingDr. Carolyn BourdeauxAssociate Professor and Associate DirectorGeorgia State Fiscal Research Center2OverviewMajor areas of state spendingChanges in the past decade across key policy areas in the South K-12 Education MedicaidHigher EducationTransportationOther long term pressures on budgetPension and  OPEB liabilitiesImpact of federal retrenchment on state and local finances3Average SLC State Per Capita Spending 2000 v. 2010 by Category (in 2010 Dollars*)2000 Share 2010 Share % ChangeCategoryEducation $1,532 39% $1,876 39% 22%Public welfare $914 23% $1,367 28% 50%Hospitals $173 4% $232 4% 34%Health $140 4% $160 3% 14%Highways $368 9% $369 7% 0%Police protection $43 1% $43 1% -1%Correction $137 4% $137 3% -1%Natural resources $78 2% $72 1% -7%Parks and recreation $23 1% $21 0% -8%Governmental administration** $131 3% $150 3% 15%Interest on general debt $90 2% $101 2% 13%Other and unallocable $291 7% $409 8% 40%Total General Expenditures $3,920 $4,938 26%Source:  US Census 2010 Annual Survey of State Government Finances.  Table shows “General Expenditures” not all expenditures which would include utilities, liquor store expenditures, and insurance trust.  *Uses national GDP price deflator to adjust for inflation **2010 Census added judicial and legal to this category. 4Average SLC State Per Capita Spending 2000 v. 2010 by Function (in 2010 Dollars*)2000 Share 2010 Share % ChangeTotal expenditure $4,322 $5,790 34%Intergovernmental expenditure $1,131 $1,290 14%Direct expenditure $3,192 $4,500 41%Current operation $2,264 71% $3,076 68% 36%Capital outlay $368 12% $396 9% 7%Insurance benefits and repayments $366 11% $797 18% 118%Assistance and subsidies $98 3% $124 3% 27%Interest on debt $95 3% $106 2% 12%Exhibit: Salaries and wages $715 $752 5%Source:  US Census 2010 Annual Survey of State Government Finances. *Uses national GDP price deflator to adjust for inflation5K-12 EDUCATION6050,000100,000150,000200,000250,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010MillionsTotal Real Revenues for K-12 Education SLC States (2010 Dollars)28% Growth7$4,543$4,619$4,590$4,555$4,502$4,587$4,674$4,856$5,079$4,993$4,687$3,442$3,574$3,691$3,723$3,856$3,943$4,174$4,346$4,289$4,390$4,208$741 $783$875$936$1,006$1,052$1,157$1,091$1,055$1,114$1,5820.002.004.006.008.0010.0012.0014.0016.0018.0020.00$0$2,000$4,000$6,000$8,000$10,000$12,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Total Enrollment in MillionsReal Per FTE Revenues by Type for "Average" SLC State and Total Enrollments (2010 Dollars)State Revenue Local Revenue Federal Revenue SLC States Enrollment8Real Per FTE K12 Education Revenues for the Average SLC State (in 2010 Dollars)Trend Between 2000 and 2010 in Per Pupil RevenuesRevenue Level 2000 Share of Total 2010 Share of Total Percent ChangeLocal $3,442 39.44% $4,208 40.16% 22.26%State $4,543 52.06% $4,687 44.74% 3.17%Federal $741 8.50% $1,582 15.10% 113.38%Total $8,726 $10,477 20.06%Total Enrollment for SLC States (millions) 16.68 18.28 10%Calculations are from revenue figures provided by the US Census F-33 Financial Survey and represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV); Table uses national GDP price deflator to adjust for inflation.9Calculations from revenue figures provided by the US Census F-33 Financial Survey. Table uses national GDP price deflator to adjust for inflation.State Comparisons 2000-2010(in 2010 Dollars)Enroll-mentGrowthState Revenue Per FTE GrowthLocal Revenue Per FTE GrowthFederal Revenue Per FTE GrowthOverall Revenue  Per FTE GrowthOverall Revenue Per FTE 2000Rank in 2000Overall Revenue Per FTE 2010Rank in 2010Change in RankAlabama 3% -3% 24% 105% 15% 8,475 10 9,724 12 -2Arkansas 5% 55% -30% 132% 34% 7,994 12 10,677 9 3Florida 11% -33% 34% 115% 7% 9,355 4 9,986 11 -7Georgia 17% -16% 13% 147% 8% 9,967 1 10,745 6 -5Kentucky 5% 5% 26% 101% 21% 8,483 9 10,242 10 -1Louisiana -12% 27% 53% 149% 51% 8,073 11 12,191 1 10Mississippi -2% 12% 30% 106% 31% 6,958 15 9,086 13 2Missouri -2% 13% 0% 163% 15% 9,255 6 10,687 8 -2North-Carolina 13% -13% 97% 115% 27% 9,084 7 11,510 3 4Oklahoma 4% -7% 30% 54% 12% 7,891 13 8,843 14 -1South-Carolina 7% 3% 28% 113% 22% 8,909 8 10,840 5 3Tennessee 7% 16% 5% 75% 16% 7,453 14 8,654 15 -1Texas 19% -1% 12% 116% 15% 9,273 5 10,694 7 -2Virginia 10% 5% 22% 124% 20% 9,965 2 12,003 2 0West-Virginia -3% 0% 20% 99% 15% 9,764 3 11,275 4 -110Key ThemesOverall a growing investment in K-12 educationIncreasing reliance on local and federal funding for education, but fiscal stress at the local level will impact education funding going forwardNational effort to increase student achievement (No Child Left Behind) with increased demands on schools 11MEDICAID12020,00040,00060,00080,000100,000120,000Y2000 Y2001 Y2002 Y2003 Y2004 Y2005 Y2006 Y2007 Y2008 Y2009MillionsTotal Real Expenditures for Medicaid SLC States (2009 Dollars)57% Growth13$5,692$5,936$5,887$5,860$6,180$6,089$5,911$6,264$6,242$6,34002,0004,0006,0008,00010,00012,00014,00016,00018,000$0$1,000$2,000$3,000$4,000$5,000$6,000$7,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009Real Per Enrollee Expenditures  for the "Average" SLC State and Total Enrollment Growth (2009 Dollars)SLC State Average Per FTE Spending Enrollment Total14Real Per Enrollee Expenditures by Fund Source for the Average SLC State (in 2009 Dollars)Fund Source Trend Between 2000 and 2009 in Per Enrollee Expenditures by Fund Source2000 Share of Total 2009 Share of Total Percent ChangeState/Local $1,945 34.17% $2,012 31.73% 3.45%Federal $3,747 65.83% $4,328 68.27% 15.50%Total $5,692 $6,340 11.38%Enrollment Total for SLC States (millions) 11.7 16.7 42.26%Revenue figures are from CMS estimates of per enrollee spending in Medicaid. Enrollment numbers are from counts of enrollments from December of each year. State and federal estimates are derived from FMAP annual shares for each state.  The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).  Inflation adjustment is made using GDP Price Deflator.15State Comparisons 2000-2009(in 2009 Dollars)Overall Growth in ExpendituresEnrollee GrowthGrowth in Per Enrollee ExpendituresPer Enrollee Exp. 2000Rank in 2000Per EnrolleeExp. 2009Rank in 2009Change in RankAlabama 33% 37% -6% 5,432 9 5,086 14 -5Arkansas 75% 50% 23% 4,767 14 5,871 10 4Florida 62% 59% 14% 5,151 10 5,855 11 -1Georgia 28% 57% -18% 5,892 7 4,835 15 -8Kentucky 36% 30% 2% 6,959 1 7,089 3 -2Louisiana 79% 47% 15% 5,520 8 6,371 8 0Mississippi 51% 24% 17% 4,983 11 5,850 12 -1Missouri 52% 16% 30% 6,436 5 8,398 1 4North Carolina 61% 48% 6% 6,868 2 7,275 2 0Oklahoma 90% 51% 26% 4,955 13 6,265 9 4South Carolina 55% 15% 33% 4,981 12 6,606 6 6Tennessee 19% -11% 26% 4,092 15 5,150 13 2Texas 85% 80% 2% 6,323 6 6,469 7 -1Virginia 62% 59% 10% 6,455 4 7,088 4 0West Virginia 38% 27% 5% 6,561 3 6,886 5 -2Revenue figures are from CMS estimates of total spending in Medicaid. Enrollee estimates are based on December enrollment counts. Table uses national GDP price deflator to adjust for inflation.16Key ThemesRapid growth is putting pressure on other areas of budget  Health care reform will expand Medicaid although the federal government will primarily finance this changeSignificant state efforts to control costs through movement to managed care, changing reimbursement structures, and measures to control enrollment growth and monitor eligibility more carefully17HIGHER EDUCATION1843% Growth$0$5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011MillionsTotal Real Revenues for Higher Education SLC States (2011 Dollars)19$7,399$7,335$6,963$6,680$6,270$6,326$6,632$7,048$7,420$6,853$6,452$6,072$2,814$2,994$3,055$3,241$3,325$3,545$3,744$3,808$3,890$3,982$4,113$4,25700.511.522.533.544.55$0$2,000$4,000$6,000$8,000$10,000$12,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011MillionsReal Per FTE Higher Education Revenues for the Average SLC State and Total Enrollment (2011 Dollars)State/Local Appropriations Net Tuition Revenue Enrollment20Real Per FTE Revenues for the Average SLC State (in 2011 Dollars)Trend Between 2000 and 2011Fund Source 2000 Share of Total 2011Share of TotalPercent ChangeState/Local Appropriations $7,399 72.45% $6,072 58.79% -17.94%Tuition $2,814 27.55% $4,257 41.21% 51.27%Total $10,213 $10,328 1.13%Total Enrollment in SLC States (millions) 2.99 4.33 45.07%Revenue figures are from State Higher Education Executive Officers Association, State Higher Education Finance Report.  Numbers are adjusted using a GDP Price Deflator to make them comparable to other budgetary numbers in this presentation.  The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).21Change in Real Revenues per Student 2000-2011State/ Local Appropriations per FTETuition Per FTEOverall Spending Per FTEStudent GrowthOverall Funding Per FTE 2000Rank in 2000Overall Funding Per FTE 2011Rank in 2011Change in RankAlabama -15% 64% 16% 28% $10,242 8 $11,906 1 7Arkansas -16% 99% 10% 44% $8,969 12 $9,890 10 2Florida -24% 14% -14% 60% $9,518 10 $8,149 15 -5Georgia -44% 2% -37% 123% $14,314 1 $9,077 14 -13Kentucky -25% 36% -6% 41% $12,321 2 $11,527 3 -1Louisiana 17% 29% 20% 8% $7,868 15 $9,438 13 2Mississippi -31% 52% -10% 36% $10,587 5 $9,502 12 -7Missouri -28% 72% -1% 17% $11,309 4 $11,197 5 -1North Carolina -4% 23% 1% 64% $11,320 3 $11,461 4 -1Oklahoma -13% 259% 21% 26% $8,265 14 $9,964 9 5South Carolina -27% 73% 9% 37% $9,232 11 $10,042 8 3Tennessee 4% 17% 9% 25% $9,691 9 $10,516 7 2Texas -2% 19% 5% 44% $10,270 7 $10,761 6 1Virginia -25% 80% 10% 38% $10,568 6 $11,655 2 4West Virginia -10% 49% 13% 29% $8,722 13 $9,839 11 222Major TrendsIncreasing reliance on tuition revenue and declining state supportOverall funding shows slight growth on a per student inflation adjusted basis Increased demand for higher educationPotential shift to on-line classrooms and on-line learning23TRANSPORTATION: HIGHWAYS24$0$10$20$30$40$50$60$702000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010BillionsSLC State Total Real Revenues for Transportation (2010 Dollars)32% Growth25$290$285 $308$296$266 $302$296$388$338$280 $302$125$129$149$146$144$146$153$155$155$150 $167$0$100$200$300$400$500$6002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Real Per Capita Highway Revenues for the Average SLC State (in 2010 Dollars)State and Local Revenues Federal Revenues26Real Per Capita Highway Revenues for the Average SLC State (in 2010 Dollars)Fund Source Trend Between 2001 and 2010 in Per Capita Revenues2000 Share of Total 2010 Share of TotalPercent ChangeState/Local $290 69.83% $302 64.35% 4.02%Federal $125 30.17% $167 35.65% 33.35%Total $415 $469 12.87%Revenue figures are from Federal Highway Administration form SF-1The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).  Inflation adjustment is made using GDP Price Deflator.27Revenue figures are from Federal Highway Administration form SF-1. Inflation adjustment is made using GDP Price Deflator.Change in Real Revenues per Capita 2000-2010 (in 2010 dollars)State/ Local Federal OverallOverall Funding per Capita 2000Rank in 2000Overall Funding per Capita 2010Rank in 2010Change in RankAlabama -3% 31% 12% $355 9 $396 12 -3Arkansas -9% 32% 2% $484 4 $496 6 -2Florida 49% 22% 42% $318 12 $452 8 4Georgia -25% 30% -3% $282 14 $272 15 -1Kentucky 9% 5% 7% $516 2 $555 4 -2Louisiana 49% 58% 52% $353 10 $537 5 5Mississippi -24% 76% 7% $407 7 $435 10 -3Missouri 33% 27% 31% $455 6 $596 2 4North Carolina 21% -22% 9% $406 8 $442 9 -1Oklahoma -12% 139% 23% $477 5 $586 3 2South Carolina 37% 33% 36% $271 15 $368 13 2Tennessee -22% 38% -3% $316 13 $305 14 -1Texas 30% -8% 18% $338 11 $398 11 0Virginia -5% 24% 0% $485 3 $485 7 -4West Virginia -23% 28% -8% $767 1 $707 1 028Major ThemesSome growth in overall funding, slight growth in state and local funds but major growth is coming from increases in federal fundsLikely declines in federal contributions in the futureEscalating maintenance costs of existing infrastructure29OTHER PRESSURES30Pension LiabilityPension Liabilities in 2009Pension Liability % FundedUnfunded LiabilityUnfunded Liability per CapitaAlabama $41,634,554 74% $10,824,984 $2,265Arkansas $22,698,906 78% $4,993,759 $1,713Florida $141,485,280 84% $22,637,645 $1,204Georgia $79,898,410 87% $10,386,793 $1,072Kentucky $35,686,737 58% $14,988,430 $3,454Louisiana $39,657,924 60% $15,863,170 $3,499Mississippi $31,386,747 67% $10,357,627 $3,491Missouri $55,314,996 79% $11,616,149 $1,940North Carolina $76,976,542 97% $2,309,296 $242Oklahoma $34,815,244 57% $14,970,555 $3,991South Carolina $42,050,701 69% $13,035,717 $2,818Tennessee $35,198,741 90% $3,519,874 $555Texas $155,679,204 84% $24,908,673 $991Virginia $69,135,000 80% $13,827,000 $1,728West Virginia $14,266,419 56% $6,277,224 $3,388US State Average 76% $2,419SLC State Average 75% $2,157Source: The Pew Center on the States, The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs, April 2011.31Retiree Health Insurance  LiabilityOPEB Liabilities in 2009OPEB Liability % Funded Unfunded LiabilityUnfunded Liability per CapitaAlabama $14,919,073 5% $14,173,119 $2,965Arkansas $1,865,809 0% $1,865,809 $640Florida $3,742,846 0% $3,742,846 $199Georgia $20,284,637 4% $19,473,252 $2,010Kentucky $8,754,555 15% $7,441,372 $1,715Louisiana $11,512,100 0% $11,512,100 $2,539Mississippi $727,711 0% $727,711 $245Missouri $3,321,637 3% $3,221,988 $538North Carolina $33,814,515 3% $32,800,080 $3,440Oklahoma $359,800 0% $359,800 $96South Carolina $9,667,187 5% $9,183,828 $1,986Tennessee $1,746,879 0% $1,746,879 $275Texas $53,890,544 1% $53,351,639 $2,122Virginia $5,830,000 26% $4,314,200 $539West Virginia $6,362,640 4% $6,108,134 $3,296US State Average 8% $2,064SLC State Average 4% $1,507Source: The Pew Center on the States, The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs, April 2011.32Major ThemesLong term drain on state resourcesStates have made over optimistic assumptions about investment returnsChanging GASB rules for reporting pension liabilities will show substantially more underfunding in pensions3348%51%44%45%41%45%37%40%41%37%36%41%38%36%26%47%46%35%34%33%33%32%32%31%31%30%30%30%29%19%LouisianaMississippiGeorgiaMissouriAlabamaTennesseeSouth CarolinaKentuckyOklahomaArkansasNorth CarolinaTexasWest VirginiaFloridaVirginiaFederal Funds as % of Total General Revenues in 2008 & 2010Federal Funds as % of Total General Revenues 2008 Federal Funds as % of Total General Revenues 201034Federal Revenues as Part of Overall State Revenues2008 2010Total General RevenueFederal RevenueAs % of TotalTotal General RevenueFederal RevenueAs % of TotalAlabama $21,974,135 $7,146,041 33% $22,989,680 $9,369,725 41%Arkansas $14,761,215 $4,511,363 31% $16,221,062 $5,978,147 37%Florida $67,717,478 $19,387,198 29% $71,341,309 $25,447,682 36%Georgia $36,671,549 $12,871,216 35% $36,479,685 $16,193,428 44%Kentucky $20,850,510 $6,609,307 32% $22,861,951 $9,149,028 40%Louisiana $29,869,122 $14,111,261 47% $27,440,627 $13,255,001 48%Mississippi $16,530,098 $7,623,193 46% $17,427,242 $8,807,805 51%Missouri $24,211,890 $8,302,647 34% $26,111,659 $11,798,319 45%North Carolina $43,097,343 $12,965,582 30% $44,057,698 $15,698,831 36%Oklahoma $17,826,212 $5,581,072 31% $19,486,441 $8,007,066 41%South Carolina $20,519,359 $6,603,842 32% $21,511,929 $7,933,502 37%Tennessee $25,178,170 $8,187,338 33% $25,517,396 $11,371,391 45%Texas $98,974,974 $29,487,222 30% $99,923,805 $41,450,202 41%Virginia $36,141,302 $6,859,440 19% $37,103,065 $9,779,654 26%West Virginia $10,754,312 $3,194,227 30% $11,561,249 $4,426,116 38%Source:  US Census 2010 Annual Survey of State Government Finances. 35Declining Federal Funds to StatesState operations are substantially financed by the federal government even prior to ARRAThe dominant source of federal funds is Medicaid which makes up over 40% of federal grant in aid to states36Key ThemesOn average, the recent recession has accelerated state retrenchment in a number of policy areasSlowed growth in education spendingFlat spending in transportation spendingDeclining growth in higher education spendingMedicaid is putting increasing pressure on state budgetsLong term issues are the decline in federal funding and the growing burden of liabilities such as pensions and retiree health care

Georgia State University ScholarWorks @ Georgia State University CSLF Presentations Center for State and Local Finance 9-25-2012 The Changing Shape of State Spending Carolyn Bourdeaux Georgia State University Follow this and additional works at: https://scholarworks.gsu.edu/ays_cslf_presentations Recommended Citation Bourdeaux, Carolyn, "The Changing Shape of State Spending" (2012). CSLF Presentations. 36. https://scholarworks.gsu.edu/ays_cslf_presentations/36 This Article is brought to you for free and open access by the Center for State and Local Finance at ScholarWorks @ Georgia State University. It has been accepted for inclusion in CSLF Presentations by an authorized administrator of ScholarWorks @ Georgia State University. For more information, please contact scholarworks@gsu.edu. 1The Changing Shape of State SpendingDr. Carolyn BourdeauxAssociate Professor and Associate DirectorGeorgia State Fiscal Research Center2OverviewMajor areas of state spendingChanges in the past decade across key policy areas in the South K-12 Education MedicaidHigher EducationTransportationOther long term pressures on budgetPension and  OPEB liabilitiesImpact of federal retrenchment on state and local finances3Average SLC State Per Capita Spending 2000 v. 2010 by Category (in 2010 Dollars*)2000 Share 2010 Share % ChangeCategoryEducation $1,532 39% $1,876 39% 22%Public welfare $914 23% $1,367 28% 50%Hospitals $173 4% $232 4% 34%Health $140 4% $160 3% 14%Highways $368 9% $369 7% 0%Police protection $43 1% $43 1% -1%Correction $137 4% $137 3% -1%Natural resources $78 2% $72 1% -7%Parks and recreation $23 1% $21 0% -8%Governmental administration** $131 3% $150 3% 15%Interest on general debt $90 2% $101 2% 13%Other and unallocable $291 7% $409 8% 40%Total General Expenditures $3,920 $4,938 26%Source:  US Census 2010 Annual Survey of State Government Finances.  Table shows “General Expenditures” not all expenditures which would include utilities, liquor store expenditures, and insurance trust.  *Uses national GDP price deflator to adjust for inflation **2010 Census added judicial and legal to this category. 4Average SLC State Per Capita Spending 2000 v. 2010 by Function (in 2010 Dollars*)2000 Share 2010 Share % ChangeTotal expenditure $4,322 $5,790 34%Intergovernmental expenditure $1,131 $1,290 14%Direct expenditure $3,192 $4,500 41%Current operation $2,264 71% $3,076 68% 36%Capital outlay $368 12% $396 9% 7%Insurance benefits and repayments $366 11% $797 18% 118%Assistance and subsidies $98 3% $124 3% 27%Interest on debt $95 3% $106 2% 12%Exhibit: Salaries and wages $715 $752 5%Source:  US Census 2010 Annual Survey of State Government Finances. *Uses national GDP price deflator to adjust for inflation5K-12 EDUCATION6050,000100,000150,000200,000250,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010MillionsTotal Real Revenues for K-12 Education SLC States (2010 Dollars)28% Growth7$4,543$4,619$4,590$4,555$4,502$4,587$4,674$4,856$5,079$4,993$4,687$3,442$3,574$3,691$3,723$3,856$3,943$4,174$4,346$4,289$4,390$4,208$741 $783$875$936$1,006$1,052$1,157$1,091$1,055$1,114$1,5820.002.004.006.008.0010.0012.0014.0016.0018.0020.00$0$2,000$4,000$6,000$8,000$10,000$12,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Total Enrollment in MillionsReal Per FTE Revenues by Type for "Average" SLC State and Total Enrollments (2010 Dollars)State Revenue Local Revenue Federal Revenue SLC States Enrollment8Real Per FTE K12 Education Revenues for the Average SLC State (in 2010 Dollars)Trend Between 2000 and 2010 in Per Pupil RevenuesRevenue Level 2000 Share of Total 2010 Share of Total Percent ChangeLocal $3,442 39.44% $4,208 40.16% 22.26%State $4,543 52.06% $4,687 44.74% 3.17%Federal $741 8.50% $1,582 15.10% 113.38%Total $8,726 $10,477 20.06%Total Enrollment for SLC States (millions) 16.68 18.28 10%Calculations are from revenue figures provided by the US Census F-33 Financial Survey and represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV); Table uses national GDP price deflator to adjust for inflation.9Calculations from revenue figures provided by the US Census F-33 Financial Survey. Table uses national GDP price deflator to adjust for inflation.State Comparisons 2000-2010(in 2010 Dollars)Enroll-mentGrowthState Revenue Per FTE GrowthLocal Revenue Per FTE GrowthFederal Revenue Per FTE GrowthOverall Revenue  Per FTE GrowthOverall Revenue Per FTE 2000Rank in 2000Overall Revenue Per FTE 2010Rank in 2010Change in RankAlabama 3% -3% 24% 105% 15% 8,475 10 9,724 12 -2Arkansas 5% 55% -30% 132% 34% 7,994 12 10,677 9 3Florida 11% -33% 34% 115% 7% 9,355 4 9,986 11 -7Georgia 17% -16% 13% 147% 8% 9,967 1 10,745 6 -5Kentucky 5% 5% 26% 101% 21% 8,483 9 10,242 10 -1Louisiana -12% 27% 53% 149% 51% 8,073 11 12,191 1 10Mississippi -2% 12% 30% 106% 31% 6,958 15 9,086 13 2Missouri -2% 13% 0% 163% 15% 9,255 6 10,687 8 -2North-Carolina 13% -13% 97% 115% 27% 9,084 7 11,510 3 4Oklahoma 4% -7% 30% 54% 12% 7,891 13 8,843 14 -1South-Carolina 7% 3% 28% 113% 22% 8,909 8 10,840 5 3Tennessee 7% 16% 5% 75% 16% 7,453 14 8,654 15 -1Texas 19% -1% 12% 116% 15% 9,273 5 10,694 7 -2Virginia 10% 5% 22% 124% 20% 9,965 2 12,003 2 0West-Virginia -3% 0% 20% 99% 15% 9,764 3 11,275 4 -110Key ThemesOverall a growing investment in K-12 educationIncreasing reliance on local and federal funding for education, but fiscal stress at the local level will impact education funding going forwardNational effort to increase student achievement (No Child Left Behind) with increased demands on schools 11MEDICAID12020,00040,00060,00080,000100,000120,000Y2000 Y2001 Y2002 Y2003 Y2004 Y2005 Y2006 Y2007 Y2008 Y2009MillionsTotal Real Expenditures for Medicaid SLC States (2009 Dollars)57% Growth13$5,692$5,936$5,887$5,860$6,180$6,089$5,911$6,264$6,242$6,34002,0004,0006,0008,00010,00012,00014,00016,00018,000$0$1,000$2,000$3,000$4,000$5,000$6,000$7,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009Real Per Enrollee Expenditures  for the "Average" SLC State and Total Enrollment Growth (2009 Dollars)SLC State Average Per FTE Spending Enrollment Total14Real Per Enrollee Expenditures by Fund Source for the Average SLC State (in 2009 Dollars)Fund Source Trend Between 2000 and 2009 in Per Enrollee Expenditures by Fund Source2000 Share of Total 2009 Share of Total Percent ChangeState/Local $1,945 34.17% $2,012 31.73% 3.45%Federal $3,747 65.83% $4,328 68.27% 15.50%Total $5,692 $6,340 11.38%Enrollment Total for SLC States (millions) 11.7 16.7 42.26%Revenue figures are from CMS estimates of per enrollee spending in Medicaid. Enrollment numbers are from counts of enrollments from December of each year. State and federal estimates are derived from FMAP annual shares for each state.  The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).  Inflation adjustment is made using GDP Price Deflator.15State Comparisons 2000-2009(in 2009 Dollars)Overall Growth in ExpendituresEnrollee GrowthGrowth in Per Enrollee ExpendituresPer Enrollee Exp. 2000Rank in 2000Per EnrolleeExp. 2009Rank in 2009Change in RankAlabama 33% 37% -6% 5,432 9 5,086 14 -5Arkansas 75% 50% 23% 4,767 14 5,871 10 4Florida 62% 59% 14% 5,151 10 5,855 11 -1Georgia 28% 57% -18% 5,892 7 4,835 15 -8Kentucky 36% 30% 2% 6,959 1 7,089 3 -2Louisiana 79% 47% 15% 5,520 8 6,371 8 0Mississippi 51% 24% 17% 4,983 11 5,850 12 -1Missouri 52% 16% 30% 6,436 5 8,398 1 4North Carolina 61% 48% 6% 6,868 2 7,275 2 0Oklahoma 90% 51% 26% 4,955 13 6,265 9 4South Carolina 55% 15% 33% 4,981 12 6,606 6 6Tennessee 19% -11% 26% 4,092 15 5,150 13 2Texas 85% 80% 2% 6,323 6 6,469 7 -1Virginia 62% 59% 10% 6,455 4 7,088 4 0West Virginia 38% 27% 5% 6,561 3 6,886 5 -2Revenue figures are from CMS estimates of total spending in Medicaid. Enrollee estimates are based on December enrollment counts. Table uses national GDP price deflator to adjust for inflation.16Key ThemesRapid growth is putting pressure on other areas of budget  Health care reform will expand Medicaid although the federal government will primarily finance this changeSignificant state efforts to control costs through movement to managed care, changing reimbursement structures, and measures to control enrollment growth and monitor eligibility more carefully17HIGHER EDUCATION1843% Growth$0$5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011MillionsTotal Real Revenues for Higher Education SLC States (2011 Dollars)19$7,399$7,335$6,963$6,680$6,270$6,326$6,632$7,048$7,420$6,853$6,452$6,072$2,814$2,994$3,055$3,241$3,325$3,545$3,744$3,808$3,890$3,982$4,113$4,25700.511.522.533.544.55$0$2,000$4,000$6,000$8,000$10,000$12,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011MillionsReal Per FTE Higher Education Revenues for the Average SLC State and Total Enrollment (2011 Dollars)State/Local Appropriations Net Tuition Revenue Enrollment20Real Per FTE Revenues for the Average SLC State (in 2011 Dollars)Trend Between 2000 and 2011Fund Source 2000 Share of Total 2011Share of TotalPercent ChangeState/Local Appropriations $7,399 72.45% $6,072 58.79% -17.94%Tuition $2,814 27.55% $4,257 41.21% 51.27%Total $10,213 $10,328 1.13%Total Enrollment in SLC States (millions) 2.99 4.33 45.07%Revenue figures are from State Higher Education Executive Officers Association, State Higher Education Finance Report.  Numbers are adjusted using a GDP Price Deflator to make them comparable to other budgetary numbers in this presentation.  The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).21Change in Real Revenues per Student 2000-2011State/ Local Appropriations per FTETuition Per FTEOverall Spending Per FTEStudent GrowthOverall Funding Per FTE 2000Rank in 2000Overall Funding Per FTE 2011Rank in 2011Change in RankAlabama -15% 64% 16% 28% $10,242 8 $11,906 1 7Arkansas -16% 99% 10% 44% $8,969 12 $9,890 10 2Florida -24% 14% -14% 60% $9,518 10 $8,149 15 -5Georgia -44% 2% -37% 123% $14,314 1 $9,077 14 -13Kentucky -25% 36% -6% 41% $12,321 2 $11,527 3 -1Louisiana 17% 29% 20% 8% $7,868 15 $9,438 13 2Mississippi -31% 52% -10% 36% $10,587 5 $9,502 12 -7Missouri -28% 72% -1% 17% $11,309 4 $11,197 5 -1North Carolina -4% 23% 1% 64% $11,320 3 $11,461 4 -1Oklahoma -13% 259% 21% 26% $8,265 14 $9,964 9 5South Carolina -27% 73% 9% 37% $9,232 11 $10,042 8 3Tennessee 4% 17% 9% 25% $9,691 9 $10,516 7 2Texas -2% 19% 5% 44% $10,270 7 $10,761 6 1Virginia -25% 80% 10% 38% $10,568 6 $11,655 2 4West Virginia -10% 49% 13% 29% $8,722 13 $9,839 11 222Major TrendsIncreasing reliance on tuition revenue and declining state supportOverall funding shows slight growth on a per student inflation adjusted basis Increased demand for higher educationPotential shift to on-line classrooms and on-line learning23TRANSPORTATION: HIGHWAYS24$0$10$20$30$40$50$60$702000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010BillionsSLC State Total Real Revenues for Transportation (2010 Dollars)32% Growth25$290$285 $308$296$266 $302$296$388$338$280 $302$125$129$149$146$144$146$153$155$155$150 $167$0$100$200$300$400$500$6002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Real Per Capita Highway Revenues for the Average SLC State (in 2010 Dollars)State and Local Revenues Federal Revenues26Real Per Capita Highway Revenues for the Average SLC State (in 2010 Dollars)Fund Source Trend Between 2001 and 2010 in Per Capita Revenues2000 Share of Total 2010 Share of TotalPercent ChangeState/Local $290 69.83% $302 64.35% 4.02%Federal $125 30.17% $167 35.65% 33.35%Total $415 $469 12.87%Revenue figures are from Federal Highway Administration form SF-1The numbers represent a per state average amount over 15 SE States (AL,AR, FL, GA, KY, LA, MS, MO, NC, OK, SC, TN, TX, VA, and WV).  Inflation adjustment is made using GDP Price Deflator.27Revenue figures are from Federal Highway Administration form SF-1. Inflation adjustment is made using GDP Price Deflator.Change in Real Revenues per Capita 2000-2010 (in 2010 dollars)State/ Local Federal OverallOverall Funding per Capita 2000Rank in 2000Overall Funding per Capita 2010Rank in 2010Change in RankAlabama -3% 31% 12% $355 9 $396 12 -3Arkansas -9% 32% 2% $484 4 $496 6 -2Florida 49% 22% 42% $318 12 $452 8 4Georgia -25% 30% -3% $282 14 $272 15 -1Kentucky 9% 5% 7% $516 2 $555 4 -2Louisiana 49% 58% 52% $353 10 $537 5 5Mississippi -24% 76% 7% $407 7 $435 10 -3Missouri 33% 27% 31% $455 6 $596 2 4North Carolina 21% -22% 9% $406 8 $442 9 -1Oklahoma -12% 139% 23% $477 5 $586 3 2South Carolina 37% 33% 36% $271 15 $368 13 2Tennessee -22% 38% -3% $316 13 $305 14 -1Texas 30% -8% 18% $338 11 $398 11 0Virginia -5% 24% 0% $485 3 $485 7 -4West Virginia -23% 28% -8% $767 1 $707 1 028Major ThemesSome growth in overall funding, slight growth in state and local funds but major growth is coming from increases in federal fundsLikely declines in federal contributions in the futureEscalating maintenance costs of existing infrastructure29OTHER PRESSURES30Pension LiabilityPension Liabilities in 2009Pension Liability % FundedUnfunded LiabilityUnfunded Liability per CapitaAlabama $41,634,554 74% $10,824,984 $2,265Arkansas $22,698,906 78% $4,993,759 $1,713Florida $141,485,280 84% $22,637,645 $1,204Georgia $79,898,410 87% $10,386,793 $1,072Kentucky $35,686,737 58% $14,988,430 $3,454Louisiana $39,657,924 60% $15,863,170 $3,499Mississippi $31,386,747 67% $10,357,627 $3,491Missouri $55,314,996 79% $11,616,149 $1,940North Carolina $76,976,542 97% $2,309,296 $242Oklahoma $34,815,244 57% $14,970,555 $3,991South Carolina $42,050,701 69% $13,035,717 $2,818Tennessee $35,198,741 90% $3,519,874 $555Texas $155,679,204 84% $24,908,673 $991Virginia $69,135,000 80% $13,827,000 $1,728West Virginia $14,266,419 56% $6,277,224 $3,388US State Average 76% $2,419SLC State Average 75% $2,157Source: The Pew Center on the States, The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs, April 2011.31Retiree Health Insurance  LiabilityOPEB Liabilities in 2009OPEB Liability % Funded Unfunded LiabilityUnfunded Liability per CapitaAlabama $14,919,073 5% $14,173,119 $2,965Arkansas $1,865,809 0% $1,865,809 $640Florida $3,742,846 0% $3,742,846 $199Georgia $20,284,637 4% $19,473,252 $2,010Kentucky $8,754,555 15% $7,441,372 $1,715Louisiana $11,512,100 0% $11,512,100 $2,539Mississippi $727,711 0% $727,711 $245Missouri $3,321,637 3% $3,221,988 $538North Carolina $33,814,515 3% $32,800,080 $3,440Oklahoma $359,800 0% $359,800 $96South Carolina $9,667,187 5% $9,183,828 $1,986Tennessee $1,746,879 0% $1,746,879 $275Texas $53,890,544 1% $53,351,639 $2,122Virginia $5,830,000 26% $4,314,200 $539West Virginia $6,362,640 4% $6,108,134 $3,296US State Average 8% $2,064SLC State Average 4% $1,507Source: The Pew Center on the States, The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs, April 2011.32Major ThemesLong term drain on state resourcesStates have made over optimistic assumptions about investment returnsChanging GASB rules for reporting pension liabilities will show substantially more underfunding in pensions3348%51%44%45%41%45%37%40%41%37%36%41%38%36%26%47%46%35%34%33%33%32%32%31%31%30%30%30%29%19%LouisianaMississippiGeorgiaMissouriAlabamaTennesseeSouth CarolinaKentuckyOklahomaArkansasNorth CarolinaTexasWest VirginiaFloridaVirginiaFederal Funds as % of Total General Revenues in 2008 & 2010Federal Funds as % of Total General Revenues 2008 Federal Funds as % of Total General Revenues 201034Federal Revenues as Part of Overall State Revenues2008 2010Total General RevenueFederal RevenueAs % of TotalTotal General RevenueFederal RevenueAs % of TotalAlabama $21,974,135 $7,146,041 33% $22,989,680 $9,369,725 41%Arkansas $14,761,215 $4,511,363 31% $16,221,062 $5,978,147 37%Florida $67,717,478 $19,387,198 29% $71,341,309 $25,447,682 36%Georgia $36,671,549 $12,871,216 35% $36,479,685 $16,193,428 44%Kentucky $20,850,510 $6,609,307 32% $22,861,951 $9,149,028 40%Louisiana $29,869,122 $14,111,261 47% $27,440,627 $13,255,001 48%Mississippi $16,530,098 $7,623,193 46% $17,427,242 $8,807,805 51%Missouri $24,211,890 $8,302,647 34% $26,111,659 $11,798,319 45%North Carolina $43,097,343 $12,965,582 30% $44,057,698 $15,698,831 36%Oklahoma $17,826,212 $5,581,072 31% $19,486,441 $8,007,066 41%South Carolina $20,519,359 $6,603,842 32% $21,511,929 $7,933,502 37%Tennessee $25,178,170 $8,187,338 33% $25,517,396 $11,371,391 45%Texas $98,974,974 $29,487,222 30% $99,923,805 $41,450,202 41%Virginia $36,141,302 $6,859,440 19% $37,103,065 $9,779,654 26%West Virginia $10,754,312 $3,194,227 30% $11,561,249 $4,426,116 38%Source:  US Census 2010 Annual Survey of State Government Finances. 35Declining Federal Funds to StatesState operations are substantially financed by the federal government even prior to ARRAThe dominant source of federal funds is Medicaid which makes up over 40% of federal grant in aid to states36Key ThemesOn average, the recent recession has accelerated state retrenchment in a number of policy areasSlowed growth in education spendingFlat spending in transportation spendingDeclining growth in higher education spendingMedicaid is putting increasing pressure on state budgetsLong term issues are the decline in federal funding and the growing burden of liabilities such as pensions and retiree health care

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The Changing Shape of State Spending

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