how does colorado stack up? the state’s economy from a
TRANSCRIPT
How Does Colorado Stack Up? The State’s Economy from a National and State Perspective
Western Interstate Commissionfor Higher Education (WICHE)
“Creating a Vision for the Future”Education Summit
June 8, 2007
Scott PattisonExecutive Director
National Association of State Budget Officers
444 North Capitol Street, NW, Suite 642 • Washington, DC 20001 • (202) 624-5382 • www.nasbo.org
2NASBO
Current Fiscal Situation
3NASBO
The Current Fiscal Situation
Fiscal 2006 state finances were strong and stableOverall fiscal 2007 state finances continue to be in good shape, although some pockets of weaknessSomewhat tighter fiscal conditions expected in fiscal 2008, but growth expectedCompetition for dollars continues:
Medicaid, pensions, IT, transportation, education, corrections, accounting changes
4NASBO
Above Average Expenditure Growth in Fiscal ’07
General Fund Expenditure Growth (%)
-4
-2
0
2
4
6
8
10
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
**20
08**
%
Actual Inflation Adjusted
*29-year historical average rate of growth is 6.5 percent **Fiscal 07 numbers are estimated; fiscal 08 reflect recommended budgets
Source: NASBO June 2007 Fiscal Survey of States
*
5NASBO
Expenditure Growth in Selected States
All States General Fund Expenditure Growth Rate Compared to Selected States General Fund Growth Rate
0
5
10
15
20
25
2007 (estimated) 2008 (recommended)
%
National Colorado Arizona Utah Kansas
Source: NASBO June 2007 Fiscal Survey of States
6NASBO
Balances Remain Healthy; Some Decline Likely for Fiscal 2008
Total Year-End Balances and Total Year-End Balances as a Percentage of Expenditures, Fiscal 1979-Fiscal 2008 (Recommended)
0
10
20
30
40
50
60
70
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007*
Total Balances as a Percentage of Expenditures Total Balance
*2007 figures are estimated; 2008 figures are recommended Source: NASBO June 2007 Fiscal Survey of States
7NASBO
Balances in Selected States
All States Balances as Percentage of Expenditures Compared to Selected States Balances as Percentage of Expenditures
0
5
10
15
20
25
2006 2007 (estimated) 2008 (recommended)
%
National Colorado Arizona Utah Kansas
Source: NASBO June 2007 Fiscal Survey of States
8NASBO
Budget Cuts have Declined Since Early 2000’s Downturn
Budget Cuts Made After the Budget Passed,Fiscal 1986-Fiscal 2007 ($ millions)
18
23
11 12
20
35
22
9 8
13
7
2 31
16
37
18
52 3
28
37
$0
$1,500
$3,000
$4,500
$6,000
$7,500
$9,000
$10,500
$12,000
$13,500
$15,000
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
*
0
10
20
30
40
Number of states (right) Amount of reduction (left)
Recession ends
Recession ends
*MI, WI, and RI have made budget cuts so far in fiscal 2007 Source: June 2007 Fiscal Survey of States
9NASBO
Spending Pressures
10NASBO
Competing Spending Pressures
Medicaid and Health CareK-12 IncreasesHigher EducationDemographic ChangesInfrastructurePensions
11NASBO
Education and Health Care: Now 64% of General Fund Spending
General Fund Spending, Fiscal 2005
All Other25.8%Transportation
0.5%
Corrections7.0%
Public Assistance2.3%
Medicaid16.9%
Higher Education11.7%
Elementary & Secondary Education
35.8%
Source: NASBO 2005 State Expenditure Report
12NASBO
Education and Health Care in Colorado: 74% of General Fund Spending
Colorado General Fund Spending, Fiscal 2005
All Other17.3%
Transportation0.0%Corrections
8.6%Public Assistance
0.0%
Medicaid20.6%
Higher Education10.2%
Elementary & Secondary Education
43.3%
Source: NASBO 2005 State Expenditure Report
13NASBO
Medicaid Spending
Total Medicaid Spending as Percentage of Total State Expenditures
0
5
10
15
20
25
30
1990 1995 2000 2005 2010*
%
Medicaid as % of Total State Expenditures
*2010 percentage projected by Health Management Associates Source: NASBO State Expenditure Report
14NASBO
Medicaid Growth inSelected States
All States Total Medicaid Growth Rate Compared to Selected States Total Medicaid Growth Rate
-2
0
2
4
6
8
10
12
14
2006 2007 (estimated) 2008 (recommended)
%
National Colorado Arizona Utah Kansas
Source: NASBO June 2007 Fiscal Survey of States
15NASBO
Enrollees Expenditures
Children = 19%
Elderly = 22%
Disabled = 46%
Adults = 13%Children = 48%
Elderly = 9%Disabled = 17%
Adults = 26%
2007 U.S. Total = 62.2 million U.S. Total = $305 billion in 2007
68% of Medicaid Spending on Benefits in 2007 is for Elderly and Disabled
26% 68%
Source: Vernon Smith, Health Management Associates
16NASBO
Higher Education in Selected States
Higher Education Expenditures as a Percent of Total Expenditures
024
68
101214
161820
2004 2005 2006 (estimated)
%
National Colorado Arizona Utah Kansas
Source: NASBO 2005 State Expenditure Report
17NASBO
Higher Education in Selected States – General Fund
General Fund Higher Education Expenditures as a Percent of Overall General Fund Expenditures
02468
101214161820
2004 2005 2006 (estimated)
%
National Colorado Arizona Utah Kansas
Source: NASBO 2005 State Expenditure Report
18NASBO
National Spending by Funding Source (Percentage)
Total State Expenditures By Funding Source, Fiscal 2005
General Funds43.7%
Federal Funds28.9%
Other State Funds25.1% Bonds
2.3%
Source: NASBO 2005 State Expenditure Report
19NASBO
Colorado Spending by Funding Source (Percentage)
Total State Expenditures By Funding Source, Fiscal 2005
General Funds40.8%
Federal Funds23.0%
Other State Funds34.6%
Bonds1.6%
Source: NASBO 2005 State Expenditure Report
20NASBO
Outlook
21NASBO
State Fiscal Outlook
Revenue and spending growth likely to slow
Balances are healthy, Calendar Year ’07 looks goodHousing decline and a slowing economy could be problematic
Tough competition for state general fundsLong-term federal fiscal imbalance threatens funds to states
DeficitsIncreasing defense, retirement and health care costs
22NASBO
www.nasbo.org