FY 11 Y FY 11 Year-End Financial Report E d Fi i l R t Interim - - PowerPoint PPT Presentation

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FY 11 Y FY 11 Year-End Financial Report E d Fi i l R t Interim Joint Committee on Appropriations and Revenue July 28, 2011 Mary Lassiter, State Budget Director John Hicks, Deputy State Budget Director Kevin Cardwell, Deputy State Budget

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SLIDE 1

FY 11 Y E d Fi i l R t FY 11 Year-End Financial Report

Interim Joint Committee on Appropriations and Revenue

July 28, 2011

Mary Lassiter, State Budget Director John Hicks, Deputy State Budget Director Kevin Cardwell, Deputy State Budget Director Greg Harkenrider, Deputy Exec. Director, Governor’s Greg Harkenrider, Deputy Exec. Director, Governor s Office of Economic Analysis

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SLIDE 2

Overview

FY 11 G l F d R t FY 11 General Fund Report FY 11 Road Fund Report FY 11 Update on Tobacco Settlement Funds Update on ARRA Expenditures

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SLIDE 3

General Fund Revenues Increased 6.5% in FY 11

Difference $ Million FY11 FY10 ($ mil.) (%) Sales and Use 2,896.3 2,794.1 102.2 3.7 I di id l I 3 41 8 3 1 4 263 3 8 3 Difference $ Million Individual Income 3,417.8 3,154.5 263.3 8.3 Corporation Income 300.8 237.9 62.9 26.4 LLET 215.7 145.9 69.8 47.8 Coal Severance 295.8 271.9 23.9 8.8 Cigarette Tax 262.2 278.4

  • 16.2
  • 5.8

Property 514.8 516.2

  • 1.4
  • 0.3

p y Lottery 200.5 200.0 0.5 0.2 Other 655.5 626.2 29.3 4.7 TOTAL 8 759 4 8 225 1 534 3 6 5 TOTAL 8,759.4 8,225.1 534.3 6.5

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SLIDE 4

General Fund Revenues Reflect E i R

8 0%

Economic Recovery

Revenue Growth Rates FY 07 ‐ FY 11

6.5%

6.0% 8.0% 4.0%

2.4% 1.1%

2.0% 0.0% FY07 FY08 FY09 FY10 FY11

2 7% ‐2.4%

‐2.0%

‐2.7%

‐4.0%

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SLIDE 5

FY 11 GF Revenues Surpassed FY 08 GF Revenue Levels

(Millions)

$8,759.4 $8,871.2

$ 8 8 0 0 $ 9 ,0 0 0

(Millions)

$8,664.3 $8,426.4 $ ,

$ 8 ,4 0 0 $ 8 ,6 0 0 $ 8 ,8 0 0

Official Estim ate

$8,225.1

$ 8 ,0 0 0 $ 8 ,2 0 0 $ 8 ,4 0 0 $ 7 ,8 0 0 $ 8 ,0 0 0 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2

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SLIDE 6

FY11 General Fund Receipts Exceed p Official Estimate by $166.1 million

($ million) Actual Estimate Diff.

  • Diff. (%)

Sales and Use 2,896.3 2,939.4

  • 43.1
  • 1.5%

($ million) Individual Income 3,417.8 3,334.6 83.2 2.5% Corporation Income 300.8 258.8 42.0 16.2% LLET 215.7 145.1 70.6 48.7% Coal Severance 295.8 230.4 65.4 28.4% Cigarette Tax 262.2 280.9

  • 18.7
  • 6.7%

Property 514.8 540.2

  • 25.3
  • 4.7%

Property 514.8 540.2 25.3 4.7% Lottery 200.5 205.4

  • 4.9
  • 2.4%

Other 655.5 658.6

  • 3.1
  • 0.5%

TOTAL 8 759 4 8 593 3 166 1 1 9% TOTAL 8,759.4 8,593.3 166.1 1.9%

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SLIDE 7

FY 11 General Fund Year-End Balance FY 11 General Fund Year End Balance

Millions FY 11 General Fund Ending Balance $289.9 Budgeted Carryforward ($133.1) General Fund Surplus $156.8 Actual vs. Budgeted Millions Revenues in Excess of Enacted Budget $166 1 Revenues in Excess of Enacted Budget $166.1 Dedicated Severance Tax Appropriations Greater than Budgeted ($31.1) Unbudgeted Lapses/Other $21.8 General Fund Surplus $156.8

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SLIDE 8

$156.8 Million FY 11 General Fund Surplus

HB 1 S l E dit Pl HB 1 Surplus Expenditure Plan

Millions Millions FY 12 Necessary Government Expenses $35.0 Deposit to the Budget Reserve Trust Fund $121 8 Deposit to the Budget Reserve Trust Fund $121.8 Total General Fund Surplus $156.8

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SLIDE 9

FY 11 NGE

Millions Millions Description Military Affairs-Disaster Match and Calling Out the Guard $12.5 Natural Resources-Fire Suppression $3 9 Natural Resources Fire Suppression $3.9 Judgments $2.7 ANOC-Guardian Ad Litem $8.9 Other $1.9 Total $29.8 FY 2010 General Fund Surplus $29.7

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SLIDE 10

NGE Recent Historical Amounts

$61.1 $ 6 0 $ 7 0

Millions

$46.2 $42.0 $38.9 $ 4 0 $ 5 0 $ 6 0 $21.8 $14.0 $20.9 $17.3 $16.7 $29.8 $ 2 0 $ 3 0 $ 0 $ 1 0 FY0 2 FY0 3 FY0 4 FY0 5 FY0 6 FY0 7 FY0 8 FY0 9 FY1 0 FY1 1

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SLIDE 11

History of Budget Reserve Trust Fund

C t d i FY 1989 Created in FY 1989 Most Deposits Made from Budget S l Surpluses Used to Balance Budget Shortfalls, b h i h i i d f both in the interim and as part of budget enactment

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SLIDE 12

$121.8 Million-Largest Deposit Ever Made to the Rainy Day Fund Made to the Rainy Day Fund

$112 5 $121.8

$120 0 $140.0

$112.5 $90.3 $100.0

$100.0 $120.0

$61.5

$80.0

$49.7 $39.3 $30 5

$40.0 $60.0

$10.0 $8.8 $5.1 $13.3 $11.3 $30.5 $5.0 $23.5 $20.0 $2 0

$20.0

Millions $0.2 $2.0 $2.0

$0.0 FY 89 FY 90 FY 91 FY 92 FY 93 FY 94 FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12

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SLIDE 13

Rainy Day Fund Has Been Used to Buffer the Impact of Shortfalls Buffer the Impact of Shortfalls

$300.0

$219.0 $240.0

$250.0 $150.0 $200.0 $100.0 $

$7 1 $16.7 $35.3 $4 0 $38.8 $4 0 $20.0

$50.0

$7.1 $4.0 $4.0

$0.0 FY 89 FY 90 FY 91 FY 92 FY 93 FY 94 FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12

Millions

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SLIDE 14

FY 11 Budget Balancing Measures

$ 1 9 3 illi i l R d d S di

$62

illi

$ 1 9 3 m illion in total Reduced Spending Required

$62 million

Enacted

$131

Appropriation Reductions

$131 million

Budgeted Gap

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SLIDE 15

FY 11 Additional Budget Balancing Measures

(Millions) General Fund Restricted Funds Total (Millions) Problem: Budgeted Gap $131.0 S l ti Solution: Debt Restructuring $67.0 $0.0 $67.0 Operational Cost Reductions $24.7 $7.0 $31.7 Furlough of State Employees $15 4 $7 9 $23 3 Furlough of State Employees $15.4 $7.9 $23.3 Non-Merit Personnel Reductions $3.4 $1.6 $5.0 Asset Sales & Rebates $4.0 $0.0 $4.0 Total Balancing Actions $114.5 $16.5 $131.0 Total Balancing Actions $114.5 $16.5 $131.0

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SLIDE 16

Additional Budget Balancing Measures

R d d t t di Reduced contract spending Reduced Non-Merit Employee costs Improved fleet management Reduced state leases Sold unneeded assets Reduced phone and information Reduced phone and information technology costs

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SLIDE 17

Contract Reductions total 24% of Agency g y Budget Cuts for FY 11

$22 million

Agency Specific Budget Cutting Actions total $ 9 2 m illion for FY 1 1

$22 million General Fund Contract Reductions $70 million Other Agency Cost Reduction Measures Measures

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SLIDE 18

Top 10 General Fund Contract Spenders (FY Top 10 General Fund Contract Spenders (FY 2010)

(millions) (millions) Behavioral Health $142 Corrections 107 Dept of Education 85

  • Dept. of Education

85 FRYSC’s 54 Community Based Services 51 Public Health 46 Aging & Independent Living 38 Council on Postsecondary Ed 38 Council on Postsecondary Ed 38 Medicaid Administration 21 Economic Development 9 (90% of General Fund contract spending) (90% of General Fund contract spending)

Note: Does not include Medicaid Benefits

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SLIDE 19

$5 Million Non-Merit Employee Reductions

T t l f 105 P iti R d d Total of 105 Positions Reduced

65 separations 22 f d d iti t fill d 22 funded positions not filled 18 positions filled at reduced salaries

G b t i l A i t R d d Gubernatorial Appointees Reduced

  • Jan. 2006 - Midterm Prior Admin.

800 Dec 2007 Beginning Beshear Admin 761

  • Dec. 2007 - Beginning Beshear Admin.

761

  • Jan. 2010 - Midterm Beshear Admin.

826 June 2011 765

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SLIDE 20

Additional Efficiency Measures Taken

Fleet m anagem ent Fleet m anagem ent

  • Take home cars – 8.8% reduction in the fleet

since FY 2008 R l t h d l f ld hi l $5 1

  • Replacement schedules for older vehicles - $5.1

million annual savings by cutting motor pool rates

  • Maintenance costs – piloting use of

Transportation maintenance garages for fleet maintenance

State Leases

  • Target of 5% reduction - $940,000 in annual

savings

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SLIDE 21

Additional Efficiency Measures Taken

I nform ation Technology I nform ation Technology

  • Enterprise view of efficiencies
  • Review of wireless device utilization and plans
  • Negotiated a discount for the state’s data
  • Negotiated a discount for the state s data

network and wireless services - $1 million

  • Auditing phone usage and charges
  • Managed Print

RFP on the street

  • Managed Print – RFP on the street

Sale of Assets

  • Two under utilized aircraft - $231,430
  • Surplus real property
  • Reimbursement for relocating bandwith

frequency - $2.5 million

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SLIDE 22

Additional Efficiency Measures Taken

Energy Managem ent in State Ow ned Energy Managem ent in State-Ow ned Buildings

  • Implementing software to enable utility billings

p e e t g so t a e to e ab e ut ty b gs and utilization to be centrally compiled in a database for review and benchmarking

  • Identifying facilities in which to place energy
  • Identifying facilities in which to place energy

control hardware that will improve the efficient utilization of energy to reduce costs

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SLIDE 23

FY 12 Budget Balancing Plans

Most Agencies have 6 0% reductions Most Agencies have 6.0% reductions from FY 10 appropriation levels

4 5% enacted reductions 4.5% enacted reductions 1.5% additional reductions in FY 11 as part of budget balancing actions

Budgeted Gap for FY 12 is $189.9 Million

$168 9 illi i d b l i i $168.9 million required balancing actions $21.0 million additional gap

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SLIDE 24

FY 12 Budget Balancing Plans

I i tl k Improving revenue outlook Halted plans for furloughs in FY 12 Agencies taking actions to reduce spending

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SLIDE 25

FY 11 Road Fund Update

R Revenues Ending Balance Surplus Expenditure Plan

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SLIDE 26

Road Fund Increased 11% in FY 11

Difference ($ Million) FY11 FY10 (mil. $) (%) Motor Fuels 732.8 655.8 77.1 11.8 Difference ($ Million) Motor Vehicle Usage 381.8 332.8 49.0 14.7 Motor Vehicle License 97.8 96.8 1.0 1.0 Motor Vehicle Operators 15.7 15.9

  • 0.2
  • 1.3

Weight Distance 74.0 70.5 3.5 4.9 Investment Income 2 0 3 6

  • 1 6
  • 45 1

Investment Income 2.0 3.6 1.6 45.1 Other 34.7 31.2 3.5 11.3 TOTAL 1,338.8 1,206.6 132.2 11.0

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SLIDE 27

FY11 Road Fund Receipts Exceeded Estimate by $73 Million

Actual Estimate

  • Diff. Diff. (%)

Motor Fuels 732 8 680 8 52 0 7 6 ($ million) Motor Fuels 732.8 680.8 52.0 7.6 Motor Vehicle Usage 381.8 362.9 18.9 5.2 Motor Vehicle License 97.8 94.6 3.2 3.4 Motor Vehicle Operators 15.7 15.4 0.3 2.2 Weight Distance 74.0 77.4

  • 3.4
  • 4.4

Investment Income 2 0 1 4 0 6 42 6 Investment Income 2.0 1.4 0.6 42.6 Other 34.7 33.3 1.4 4.2 TOTAL 1,338.8 1,265.8 73.0 5.8

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SLIDE 28

Road Fund Surpassed FY 08 Levels in FY11

(Millions)

$1,338.8 $1,340.9

$ 1 ,3 5 0 $ 1 ,4 0 0

( )

$1,262.8 $1 206 6

$ 1 ,2 5 0 $ 1 ,3 0 0

Official Estim ate

$1,192.0 $1,206.6

$ 1 ,1 5 0 $ 1 ,2 0 0 $ 1 ,1 0 0 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2

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SLIDE 29

FY11 Road Fund Ending Balance

Actual vs. Budgeted Millions Revenues in Excess of Enacted Budget $73.0 Dedicated Motor Fuels Tax Appropriations Greater than Budgeted ($27.9) Fund Transfers in Excess of Enacted Budget $2.2 Unbudgeted Lapses $20.2 Road Fund Surplus $67.5

HB 1 Road Fund Surplus Expenditure Plan All surplus funds deposited into State Construction All surplus funds deposited into State Construction Account

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SLIDE 30

FY 11 Tobacco Settlement Funds Update

A t l R i t 10 3% l th Actual Receipts 10.3% less than budgeted P ti t R d ti M d Proportionate Reductions Made

Enacted Revised Percentage Enacted Appropriations Reductions Revised Appropriations Percentage Reduction Revenue $275,000 ($28,383) $246,617

  • 10.3%

Rural Development Fund $55,517,500 ($5,730,095) $49,787,405

  • 10.3%

p ( ) Health Care Improvement $27,758,700 ($2,864,997) $24,893,703

  • 10.3%

Early Childhood Development $27,758,800 ($2,865,097) $24,893,703

  • 10.3%

Total $111,310,000 ($11,488,573) $99,821,427

  • 10.3%
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SLIDE 31

Update on ARRA Spending

Kentucky was awarded $3 5 billion Kentucky was awarded $3.5 billion. The total is comprised of 2,645 individual grants 47 loans and 916 individual grants, 47 loans, and 916 federal contracts. Approximately $3 billion of the total is Approximately $3 billion of the total is channeled through state government by formula, match, or competitive award. , , p 92% of funds have been expended.

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SLIDE 32

Update on ARRA Spending

Millions % Expended Stimulus Funds Used to Help Balance FY 10 and FY 11 Budgets Medicaid Enhanced Matching $1,247.9 100.0% State Fiscal Stabilization Funds $651.3 100.0% $1 899 2 100 0% $1,899.2 100.0% Formula ARRA Grant Spending Transportation $367.0 76.0% K-12 Education $307.2 91.0% Health and Human Services $157.1 78.5% Employment Assistance/Job Training $75.5 97.0% Employment Assistance/Job Training $75.5 97.0% Water/Sewer Infrastructure $57.7 81.0% Energy and Environment $49.7 67.0% Justice $16.0 86.0% Other $12.0 85.3% $1,042.2 82.4% , Total-Formula ARRA Spending $2,941.4 93.5% Competitive Awards (excluding Universities) $45.8 72.0%

As of June 30, 2011

Total ARRA Spending through Ky State Government $2,987.2 92.2%

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SLIDE 33

FY 11 Y E d Fi i l R t FY 11 Year-End Financial Report

Interim Joint Committee on Appropriations and Revenue

July 28, 2011

Mary Lassiter, State Budget Director John Hicks, Deputy State Budget Director Kevin Cardwell, Deputy State Budget Director Greg Harkenrider, Deputy Exec. Director, Governor’s Greg Harkenrider, Deputy Exec. Director, Governor s Office of Economic Analysis