Budget Outlook and Methodology - Washington · 30-01-2019 · Budget Outlook Presentation Sarian...

Budget Outlook Methodology & Adoption

January 30, 2019

Washington State Economic and Revenue Forecast Council

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AGENDA

Budget Outlook Methodology & Adoption Meeting

January 30, 2019

10:00 a.m.

Call to order

Approval of meeting minutes: November 20, 2018

Methodology for the Budget Outlook

Budget Outlook Adoption

Adjourn

STATE OF WASHINGTON

ECONOMIC AND REVENUE FORECAST COUNCIL

PO Box 40912 Olympia, Washington 98504-0912 (360) 534-1560

Meeting Minutes Revenue Review

November 20, 2018 John A Cherberg, Senate Hearing Room 3

Economic and Revenue Forecast Council

Members Present Staff

Christine Rolfes, Senate, ERFC Chair

John Braun, Senate (via phone)

Ed Orcutt, House of Representatives

Timm Ormsby, House of Representatives (via phone)

Duane Davidson, Treasurer

David Schumacher, Office of Financial Management

Vikki Smith, WaTech

Steve Lerch, Executive Director

Sarian Scott, Senate

Andy Toulon, House

Pam Davidson, OFM

Call to Order

Senator Rolfes called the meeting to order at 10:01 a.m.

Motion

Representative Orcutt moved, seconded by Director Schumacher, to adopt the November 6,

2018 meeting minutes. Motion passed at 10:02 a.m.

Forecast Presentation

Dr. Lerch presented information on the economic and revenue forecast. Dr. Lerch summarized

the forecast changes.

Motion

Representative Orcutt moved, seconded by Senator Rolfes, to adopt the baseline revenue

forecast. Council approved the motion unanimously at 10:20 a.m.

Budget Outlook Presentation

Sarian Scott, Andy Toulon, and Pam Davidson presented information on the four-year budget

outlook.

Motion

Representative Orcutt made a motion to adopt the budget outlook as presented, seconded by

Senator Rolfes. Council approved the motion unanimously at 10:29 a.m.

Administrative

The Senate Democrat’s term as chair is completed. Following the ERFC practice, Representative

Orcutt, representing the House Republicans will be chair effective January 2019 for a two-year

term.

Adjournment

With no further business, the meeting adjourned at 10:33 a.m.

Economic and Revenue Forecast Council 1

FY 2018 FY 2019 2017-19 FY 2020 FY 2021 2019-21 FY 2022 FY 2023 2021-23

1,149 2,111 1,149 1,460 688 1,460 526 326 526

22,143 23,657 45,799 24,443 25,559 50,002 26,709 27,911 54,620

November 2018 Revenue Forecast 22,143 23,657 45,799 24,443 25,559 50,002 26,447 27,348 53,795

Addtl Revenue Based on 4.5% Growth Assumption - - - - - - 263 563 826 - - - - - - - - -

(198) (490) (688) 1,145 2,300 3,445 2,349 2,490 4,839

GF-S Transfer to BSA (1%) (216) (222) (438) (243) (264) (507) (274) (283) (557)

GF-S Extraordinary Revenue to BSA - (1,575) (1,575) - - - - - -

Extraordinary Revenue from BSA to GF-S - 1,078 1,078 - - - - - -

Prior Period and CAFR Adjustments 65 20 86 20 20 41 20 20 41

Budget Driven Revenue - - - (8) (7) (15) 3 11 14

Other Legislation - - - 1,246 2,429 3,676 2,599 2,723 5,322

Fund Transfers 59 208 267 129 121 250 - 19 19

McCleary Penalty Account (105) - (105) - - - - - - - - - - - - - - -

23,094 25,277 46,260 27,048 28,547 54,907 29,584 30,727 59,986 - - - - - - - - -

21,036 23,626 44,661 21,035 23,626 44,661 23,815 24,009 47,824 - - - - - - - - -

- - - 3,037 406 3,442 418 424 842 - - - - - - - - -

- 208 208 917 2,056 2,973 2,863 3,326 6,189

K-12 Education - 19 19 103 833 935 1,201 1,548 2,749

SEBB Rate - - - 132 165 297 166 167 333

Low Income Health Care & Comm Behavioral Health - 47 47 215 382 597 406 418 824

Hospital Safety Net - - - - - - 146 146 292

Social & Health Services - 65 65 170 330 500 354 363 718

Trueblood Lawsuit Fines - 47 47 48 48 96 48 48 96

Higher Education - 1 1 33 51 84 57 64 121

Corrections - 23 23 48 57 105 58 59 117

All Other - 26 26 146 101 247 95 144 239

ECEAP Entitlement - - - - - - - 48 48

Debt Service - (21) (21) (8) 57 49 69 59 127

Employee Health & Benefits - - - 31 31 62 31 31 62

Pension Funding Stabilization Account - - - - - - 231 231 463 - - - - - - - - -

- 127 127 1,494 2,063 3,557 2,299 2,550 4,849

K-12 Education - 0 0 194 332 526 427 458 884

SEBB Rate - - - 258 388 646 391 390 781

Low Income Health Care - 49 49 70 38 108 35 36 71

Hospital Safety Net - - - - - - (146) (146) (292)

Social & Health Services - 1 1 72 106 178 122 128 250

Trueblood Lawsuit Fines - (28) (28) (48) (48) (96) (48) (48) (96)

Trueblood Settlement Agreement - - - 43 47 91 76 83 159

Behavioral Health-Other - 54 54 116 156 273 188 241 429

Higher Education - 1 1 141 183 324 224 240 465

Corrections - 17 17 39 38 77 32 28 59

All Other - 33 33 317 318 635 365 407 773

ECEAP Entitlement - - - 11 26 37 45 17 63

Debt Service - - - 4 46 50 142 261 403

Employee Compensation - - - 181 285 465 287 290 577

Non-Employee CBAs - - - 70 117 187 126 130 256

Employee Health & Benefits - - - 3 4 7 4 4 8

Pensions - - - 22 28 50 29 30 59 - - - - - - - - -

(53) (143) (196) (123) (130) (254) (136) (141) (277) - - - - - - - - -

20,983 23,817 44,800 26,360 28,021 54,380 29,259 30,168 59,427 - - - - - - - - -

2,111 1,460 1,460 688 526 526 326 559 559 - - - - - - - - -

Beginning Balance 1,638 1,369 1,638 1,606 1,892 1,606 2,217 2,565 2,217

GF-S Transfer to BSA (1%) 216 222 438 243 264 507 274 283 557

GF-S Extraordinary Revenue to BSA - 1,575 1,575 - - - - - -

Extraordinary Revenue from BSA to GF-S - (1,078) (1,078) - - - - - -

BSA Transfer to Pension Stabilization Acct (463) (463) (925) - - - - - -

Appropriations from BSA (41) (43) (84) - - - - - -

Interest Earnings/Prior Period Adjustments 19 23 41 44 61 105 74 88 162 - - - - - - - - -

1,369 1,606 1,606 1,892 2,217 2,217 2,565 2,936 2,936 - - - - - - - - -

3,480 3,066 3,066 2,580 2,744 2,744 2,891 3,495 3,495

2017-19 2019-21 2021-23

Beginning Balance

Governor's Proposed 2019-21 Omnibus Operating Budget Official OutlookGeneral Fund-State, Education Legacy Trust Account, Opportunity Pathways Account and Budget Stabilization Account

(Dollars in Millions)

Current Revenues

Other Resource Changes

Total Revenues and Resources

Enacted Appropriations

Carryforward Level Adjustments

Budget Stabilization Account

Budget Stabilization Account Ending Balance

Total Reserves

Maintenance Level Total

Policy Level Total

Reversions

Revised Appropriations

Projected Ending Balance

January 29, 2019Economic and Revenue Forecast Council 3

Overview of the Methodology for the State Budget Outlook (January 2019)

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Introduction The purpose of this document is to provide an overview of the methodology used to develop the four-year budget projections pursuant to Chapter 8, Laws of 2012, 1st sp. sess. (SSB 6636). This document summarizes the major components of the projection, the overall approach, as well as the assumptions used in the State Budget Outlook (Outlook) document. The amounts reflected in the Outlook are the sum of the state General Fund, the Education Legacy Trust Account, and the Opportunity Pathways Account. Resources Pursuant to Chapter 8, Laws of 2012, 1st sp. sess. (SSB 6636), the amounts depicted include the actual/projected revenue and other resources. Some of the largest components include: Beginning Fund Balance The Outlook uses the certified fund balance in accordance with generally accepted accounting principles for the most recently closed biennium as the starting point. The beginning fund balance for subsequent years is equal to the projected ending balance for the previous year. Revenue Forecast The amounts for 2017-19 and 2019-21 reflect the November 2018 quarterly revenue forecast by the Economic and Revenue Forecast Council (ERFC). The provisions of Chapter 8, Laws of 2012, 1st sp. sess. (SSB 6636) call for the ensuing biennium revenue (in this instance, the 2021-23 biennium) to be based on the greater of: (1) the official revenue forecast for the ensuing biennium; or (2) an assumed revenue increase of 4.5 percent per year for that ensuing biennium. Because the November 2018 forecast projects revenue growth of less than 4.5 percent per year in the 2021-23 biennium, this Outlook uses the 4.5 percent growth rate. Transfers to Budget Stabilization Account Pursuant to a constitutional amendment approved by the voters in 2007, this reflects the transfer of one percent of general state revenues for each fiscal year (FY) to the Budget Stabilization Account (BSA). The estimated transfer amounts are based on the calculation of estimated general state revenues as defined in Article VIII, section 1, of the Constitution. The calculation of estimated general state revenues is based on the November 2018 revenue forecast. Extraordinary Revenue Growth Pursuant to a constitutional amendment approved by the voters in 2011, this reflects the transfer of three-quarters of extraordinary revenue growth into the budget stabilization account. Extraordinary revenue growth (ERG) is defined in the state Constitution as growth in general state revenues for the fiscal biennium that exceeds the average biennial percentage growth of the prior five fiscal biennia by one-third. The state Constitution also provides that the transfer only occurs to the extent that it exceeds the normal transfer amount into the Budget Stabilization Account. A transfer of $1.575 billion in 2017-19 is reflected from the GF-S into the BSA, based on the November 2017 revenue forecast. Chapter 29, Laws of 2017, 3rd Special Session (EHB 2190) directs that the State Treasurer must transfer from the BSA to GF-S $1.078 billion in the 2017-19 Biennium.



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Enacted Fund Transfers This category reflects all enacted fund transfers made through the 2018 legislative session (including special sessions) after accounting for vetoes. For more information, see the 2018 Legislative Budget Notes at: http://leap.leg.wa.gov/leap/budget/lbns/2018LBN.pdf. Governor's Proposed Resource Changes Fund Transfers The Governor’s budget proposes transfers as listed below.

Transfers Proposed in the Governor’s 2019-21 Supplemental Budget

2019-21 2021-23

From General Fund to Tourism Marketing Account $(3.0) M

From Public Works Assistance Account to Education Legacy Trust Account $140.0 M

From School Employee Benefits Account to the General Fund (repay loan) $38.7 M

From Treasurer’s Service Account to the General Fund $20.0 M

From Criminal Justice Treatment Account to the General Fund $8.4 M

From Disaster Assistance Account to the General Fund (FEMA Reimbursement) $46.0 M $19.0 M

Total $250.1 M $19.0 M

Proposed Revenue Changes The Governor is proposing several pieces of legislation that affect revenues:

Governor Inslee’s Revenue Proposals

2019-21 2021-23

Business & Occupation Tax on Services (80% to ELTA/20% to General Fund) (HB 1343/SB 5129)

$2,572.9 M $2,972.9 M

Capital Gains Tax (HB 1343/SB5129) $976.0 M $2,141.3 M

Graduated REET (HB 1228/SB 5130) (To ELTA) $17.9 M $19.4 M

Extend Renewable Energy M&E (HB 1211/SB 5116) $(0.0) M $(0.0) M

Commercial Building Retrofit Tax Incentive (HB 1257/SB 5293) $0.0 M $(2.0) M

Extend Renewable Energy Cost Recovery Incentives (HB xxxx/SB xxxx) $(4.8) M $(6.3) M

Tobacco and Vapor Products age-related sales (HB 1074/SB 5057) $(8.9) M $(12.1) M

Wayfair – Retail Sales Tax (HB xxxx/SB xxxx) $92.8 M $133.9 M

Wayfair – Business & Occupation Tax (HB xxxx/SB xxxx) $30.2 M $74.5 M

Total $3,675.6 M $5,321.6 M

Because the Governor’s budget results in a net increase in revenues to the General Fund, it is assumed that the 1 percent transfer from the General Fund to the BSA would be increased by $16.1 million in the 2019-21 biennium and by $29.3 million in the 2021-23 biennium.


http://leap.leg.wa.gov/leap/budget/lbns/2018LBN.pdf


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Budget Driven Revenue Adjustments Adjustments are made to reflect the difference between assumed transfers of cannabis, liquor and lottery revenue to the General Fund in the November forecast and what is estimated to be available after adjusting for the Governor's proposed spending levels.

Governor Inslee’s Budget Driven Revenue

2019-21 2021-23

Liquor Control Board (Marijuana) $(3.6) M $15.9 M

Liquor Control Board (Liquor) $(9.8) M $0.3 M

Lottery $(1.6) M $(2.0) M

Total $(15.0) M $14.3 M

Expenditures As the starting point for the expenditure projection, the Outlook utilizes the most recently enacted budget (the 2018 Supplemental budget). It is based on these 2017-19 budget appropriation levels, and then reflects adjustments for the Governor’s Maintenance Level (ML) estimates. For more information on the 2017-19 Budget, please see: http://leap.leg.wa.gov/leap/budget/index_lbns.asp. Assumed Reversions Reversions for FY2018 have been updated to reflect actuals. Reversion assumptions for FY2019, and each FY thereafter, are based on 0.5% of general fund state, consistent with prior ERFC direction. Estimating Costs for the Subsequent Fiscal Biennium Per statute, the estimated expenditures in the Outlook reflect the cost to continue current programs, entitlement program growth, and actions required by law in the subsequent fiscal biennium (i.e. the 2021-23 biennium). The general approach to estimating the cost to continue current programs and growth in entitlement programs is by applying a historical growth factor to the FY cost or savings associated with a budget item. The historical growth factors used to estimate increased costs in the subsequent fiscal biennium are updated each biennium through a joint effort by legislative and executive branch staff and ultimately adopted by the ERFC. The growth factors were adopted by the ERFC on November 6, 2018. Additional information on the calculation of the historical growth factors adopted by the ERFC for the current outlook can be found in the following document available on the ERFC website: https://erfc.wa.gov/sites/default/files/public/documents/budget/20181106_MemoToERFC_GrowthRates.pdf There are some cases whereby simply applying the growth factor to the cost or savings of a budget item is not used to estimate costs in the subsequent fiscal biennium. These include the following situations:

Custom adjustments. Custom adjustments are used when the estimated annual costs in the subsequent fiscal biennium are expected to be significantly different from the second FY of the current biennium. This occurs primarily when a policy is being phased in during the second FY of a biennium or may be delayed until the subsequent fiscal biennium. In most cases, the growth factor is applied after a custom adjustment is made to reflect the phase in for the policy item. In a small number of cases, the custom adjustment already accounts for the types of growth captured by the growth factor and so the growth factor is not applied.


http://leap.leg.wa.gov/leap/budget/index_lbns.asp

https://erfc.wa.gov/sites/default/files/public/documents/budget/20181106_MemoToERFC_GrowthRates.pdf

https://erfc.wa.gov/sites/default/files/public/documents/budget/20181106_MemoToERFC_GrowthRates.pdf


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One-Time costs. Certain items in the budget are one-time for the current biennium and therefore the related costs or savings are not carried forward into the subsequent biennium.

Compensation items. Because the Outlook statute specifically excludes any additional future costs related to collective bargaining agreements (CBAs) not approved by the Legislature, or salaries and benefits, no growth factor is applied to compensation related items. However, a custom adjustment is applied to items that are not fully implemented in the second year of the biennium to capture the full cost in the subsequent fiscal biennium.

Maintenance Level Revisions In this section, additional adjustments are made to reflect the costs of continuing to comply with current law provisions. This is often referred to as ML. Pursuant to the provisions of Chapter 8, Laws of 2012, 1st sp.s. (SSB 6636), this excludes the costs of policy enhancements, including new CBAs not approved by the Legislature, other proposed compensation increases, and costs of any adverse court rulings within 90 days of each respective legislative session. The Governor’s statewide ML estimate, by biennial period:

2019-21 biennial estimate: $2.973 billion, and

2021-23 biennial estimate: $6.189 billion. These estimates are total impacts. These amounts are based on the Governor's budget and will change prior to the enacted 2019-21 biennial budget. The impacts follow for reference. Kindergarten – Grade 12 (K-12) Schools The amounts depicted reflect the November 2018 caseload and K-12 entitlement changes. ML adjustments total $935 million in the 2019-21 biennium and $2.749 billion in the 2021-23 biennium. This includes, but is not limited to, enrollment/workload adjustments, K-12 salary allocations, local forest revenue, professional learning days and inflation. In addition to the above changes, there is one K-12 ML budget item displayed separately in the Outlook:

School Employees Benefit Rate is included in the November Outlook, at $297 million for 2019-21 and $333 million for 2021-23.

Higher Education Higher Education adjustments are generally related to the College Bound Scholarship program, maintenance and operations, leased facility adjustments, and a technical correction item to add back several financial aid programs that were not updated in carry-forward level. The average growth factor for this grouping is 0.1 percent per fiscal year.

ML adjustments total $84 million in the 2019-21 biennium and $121 million in the 2021-23 biennium. Included in the above impact is the cost of Initiative 732 Cost of Living Adjustments at a cost of $23 million in 2019-21 and $52 million in 2021-23.

Low Income Health Care and Community Behavioral Health The amounts depicted reflect the caseload and per capita cost information, as well as other mandatory maintenance level changes. Some of the major cost components include utilization, caseload, and medical inflation. The average growth factor for this grouping is 2.89 percent per fiscal year.

ML adjustments total $597 million in 2019-21 and $824 million in 2021-23.



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This includes, but is not limited to, utilization changes, caseload adjustments, and adjustments related to an increase in the state share of cost for clients receiving services under the Children's Health Insurance Program (CHIP). In addition to the above changes, there is one Low Income Health Care item displayed separately in the Outlook:

Hospital Safety Net is included at a cost of $292 million in 2021-23 if the program is not extended.

Department of Social and Health Services The amounts depicted reflect caseload and per capita cost information, as well as other mandatory maintenance level changes. Some of the major cost components include utilization and severity of client needs. The average growth factor for this grouping is 3.27 percent per FY.

ML adjustments total $500 million in the 2019-21 biennium and $718 million in the 2021-23 biennium.

This includes, but is not limited to, utilization changes, caseload adjustments, and items related to the loss of federal revenue available to support the state hospitals. In addition to the above changes, there is one Social and Health Services item displayed separately in the Outlook:

Trueblood litigation fines, at a cost of $96 million per biennium. Corrections The amounts depicted reflect caseload, as well as other mandatory maintenance level changes. The average growth factor for this grouping is 1.33 percent per FY.

ML adjustments total $105 million in the 2019-21 biennium and $117 million in the 2021-23 biennium.

This includes, but is not limited to, caseload changes for the community supervision population and the prison/institution population. All Other This area includes all other agencies not reflected in the preceding Outlook groups. Many are general government agencies, smaller human service agencies, the department of child youth and families (DCYF), natural resource agencies, legislative agencies, and judicial agencies. The average growth factor for this grouping is 0.42 percent per FY.

ML adjustments total $247 million in the 2019-21 biennium and $239 million in the 2021-23 biennium. Included in these amounts is the Public Safety Account Transfer at a cost of $50 million each biennium.

This includes, but is not limited to, caseload changes for DCYF and maintenance items. Early Childhood Education and Assistance Program Entitlement (ECEAP) Per statute, ECEAP entitlement costs are reflected in Fiscal Year 2023 at a cost of $48 million.



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Debt Service The amounts depicted reflect the cost of the debt on all capital budget bonds that are currently authorized using the bond model to calculate estimated costs for the 2021-23 biennium. The amounts are $49 million for 2019-21 and $127 million for 2021-23. Employee Health Benefits The change to biennialize the cost of state employee health benefits is $62 million each biennium. Pension Funding Stabilization Account In the 2017-19 fiscal biennium, $925.2 million was transferred from the BSA into the Pension Funding Stabilization Account (PFSA), an account that may be used only for the cost of state employer contributions to state pension systems. This allowed for a General Fund-State savings of an equal amount spread over the 2017-19 and 2019-21 fiscal biennia as funding for state agency pension contributions during this period are paid from the funds transferred into the PFSA. These funds will be fully spent by FY 2021-23 and the amount depicted reflects the general fund-state impact for this period. Policy Level Items In this section, referred to as Policy Level (PL), adjustments are made to reflect the policy level expenditures included in the Governor’s proposed budget. PL adjustments total $3,557 million in 2019-21 and $4,849 million in 2021-23. Kindergarten – Grade 12 (K-12) Schools The Governor proposes to increase funding for K-12 Schools by $526 million in 2019-21 and by $884 million in 2021-23. The major components of this increase are:

Local Effort Assistance: $214 million in 2019-21 and $282 million in 2021-23; Social-Emotional Learning Support: $156 million in 2019-21 and $311 million in 2021-23; Special Education: $94 million in 2019-21 and $195 million in 2021-23; School Employee Benefits (health insurance): $646 million in 2019-21 and $781 million in 2021-

23; Various other enhancements in the K-12 system, such as para-educator training, investments in

science education, and other investments: $62 million in 2019-21 and $98 million in 2021-23; Higher Education The Governor proposes to increase funding for Higher Education by $324 million in 2019-21 and by $465 million in 2021-23. The major components of this increase are:

Foundational Support: $64 million in 2019-21 and $66 million in 2021-23; College Promise Scholarship (formerly State Need Grant): $103 million in 2019-21 and $218

million in 2021-23; Program Enhancements and Student Support: $50 million in 2019-21 and $50 million in 2021-23;

Low-Income Health Care The Governor proposes to increase funding for Low Income Health Care by $108 million in 2019-21 and by $71 million in 2021-23. The major components for Low Income Health Care are:

Healthier Washington Savings Restoration: $55 million in 2019-21 and $57 million in 2021-23; Primary Care Rate Increase: $57 million in 2019-21 and $61 million in 2021-23; Eliminate Medicaid Rate Increase: Savings of $49 million in 2019-21 and savings of $78 million in

2021-23.



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In addition to the above changes, there is one Low Income Health Care item displayed separately in the Outlook:

Maintain Hospital Safety Net: The Governor’s budget assumes the extension of maintaining the hospital safety net, saving $292 million in 2021-23;

Behavioral Health The major components for Community Behavioral Health are:

Community Long-Term Inpatient Beds: $37 million in 2019-21 and $95 million in 2021-23; Additional Enhanced Discharge: $114 million in 2019-21 and $166 million in 2021-23. State Hospital Operations: $82 million in 2019-21 and $86 million in 2021-23.

In addition to the above changes, there are two groups of items displayed separately in the Outlook: Trueblood Settlement Agreement: $91 million in 2019-21 and $159 million in 2021-23; Trueblood Fine Reductions: -$96 million in 2019-21 and -$96 million in 2021-23.

Department of Social and Health Services The Governor proposes to increase funding for DSHS programs by $178 million in 2019-21 and by $250 million in 2021-23. The major components for DSHS are:

Enhance Community Residential Rate: $59 million in 2019-21 and $128 million in 2021-23; Department of Corrections The Governor proposes to increase funding for Department of Corrections by $77 million in 2019-21 and by $59 million in 2021-23. The major components for DOC are:

Capital Project Operating Costs: $17 million in 2019-21 and $24 million in 2021-23; Various items related to health care delivery in prisons: $28 million in 2019-21 and $26 million

in 2021-23; Work Release Expansion: $15 million in 2019-21 and $21 million in 2021-23;

Debt Service PL changes reflect the additional debt service required for bonds assumed in the Governor’s proposed Capital budget. Amounts are $50 million for 2019-21 and $403 million for 2021-23. Early Childhood Education and Assistance Program Entitlement The Governor proposes to phase in the ECEAP entitlement costs starting in 2019-21 at a cost of $37 million in 2019-21 and $63 million in 2021-23. Other This area includes all other agencies not reflected in the preceding Outlook groups. Many are general government agencies, smaller human service agencies, natural resource agencies, legislative agencies and judicial agencies. Other PL changes total $635 million in 2019-21 and $773 million in 2021-23. The major components are:

Reduce Homelessness: $93 million in 2019-21 and $93 million in 2021-23; Preschool Expansion: $30 million in 2019-21 and $106 million in 2021-23; Funding in the Department of Employment Security to administer a competitive grant program

to create and implement new career-connected learning programs to meet the needs of students and employers: $26 million in 2019-21 and $41 million in 2021-23;



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Compensation The Governor’s proposed budget funds all CBAs, and provides the same General Wage increase to non-represented staff. This results in adjustments of $465 million in 2019-21 and $577 million in 2021-23. Adjustments related to non-employee provider agreements are $187 million in 2019-21 and $256 million in 2021-23. State employee health benefits require $7 million in 2019-21 and $8 million in 2021-23. Pensions Spread throughout all budget areas are costs for a one-time 3 percent increase for eligible Public Employee and Teachers Retirement Systems Plan 1 members at a cost of $50 million in 2019-21 and $59 million in 2021-23.


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