The great debate of the 2010 legislative session will not be over new taxes. That’s not happening.
The debate is over how deeply to cut the current Fiscal Year 2010 state budget, how deeply to then cut the FY 2011 budget that begins July 1 from FY 2010 levels and how much special fund money is available to throw into the state’s revenue gap to offset historic revenue shortfalls.
Those shortfalls are forecast to be at least $380 million in FY 2010, as much as $750 million in FY 2011 and as much as $1.2 billion in FY 2012. The largest current pools of special fund revenue to throw into the budget gaps include $220 million in the Health Care Trust Fund (state tobacco settlement fund) and $235 million in the Working Cash Stabilization Fund or so-called “rainy day” fund.