Budget Reconciliation and Financing Act Has Multi-Year Cuts for Local Aid Programs

Accompanying the budget bill is the Budget Reconciliation and Financing Act (BRFA) of 2010. This Act makes the necessary changes in statutory language to alter formulas and other funding requirements to implement the budget at reduced levels or transfer special funds to the general fund.  BRFA language limits the increase in school bus transportation and authorizes the transfer of the $350 million from the Local Income Tax Reserve Fund to the General Fund to be paid back by the State in $50 million increments over the course of seven years.

Additional language in the BRFA has multi-year consequences for local aid programs:

  • Community colleges, local health, police aid, and highway user revenue will continue to be flat funded into FY 2012
  • Beginning in FY 2013, the percentage of the General Fund appropriation per full-time equivalent student used in the community college formula will be adjusted downward to 22%  and reach the 29% level in FY 2016
  • Makes the new funding level for Local Health Departments the new permanent “base” with new growth beginning from that much lower level starting in FY 2013

As reported previously, the BRFA also transfers $103,113,000 of unexpended balance of the funds for the local share of Program Open Space and includes a three-year replacement of these funds using State bonding.

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