On Sunday, the Legislature passed a 2021 supplemental to the 2019–21 operating budget. The governor has not yet signed the budget; he will assuredly make some line-item vetoes, so these numbers are not final. Also, note that the numbers in this post do not include substantial federal relief funding—we’ll look at those dollars in a separate post.

The operating budget passed by the Legislature would reduce spending from funds subject to the outlook (NGFO) by $1.138 billion for 2019–21. Maintenance level changes (the cost of continuing current services, adjusted for caseloads and inflation) reduce appropriations by $927.4 million and new policies would reduce appropriations by $210.3 million. The policy level number includes NGFO savings of $652.7 million in 2019–21 from the enhanced federal Medicaid match (FMAP). The enhanced match was provided in the federal COVID-19 relief bills; it supplants state funding for Medicaid. (The chart below removes these savings to better reflect new state spending.)

Some notable NGFO policy items in the supplemental:

• $117.1 million in emergency pupil transportation funding (to address the fact that there are fewer riders in SY 2020–21).
• $95.9 million for enrollment stabilization for school districts that do not receive federal relief funding sufficient “to offset reductions to state revenues due to declines in enrollments” from SY 2019–20 to SY 2020–21.
• $90.7 million to continue temporary COVID rate increases for long-term care and developmental disabilities service providers through June 2021.
• $82.0 million for the unemployment compensation fund.

(Here’s an overview of the budget as passed the Legislature.)