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State budget proposals reflect economy: AK, CO, FL, MS, WY reviewed

January 11, 2018

States are beginning their next round of budget proposals, following last year’s cautious approach to budgeting. SSTI begins its review of the proposals this week, presenting findings on how states are funding elements of the innovation economy with a review of Alaska, Colorado, Florida and Wyoming state budgets. While Alaska and Wyoming continue to recover from budget shortfalls exacerbated by their dependence on the energy industry, Colorado and Florida both include initiatives to increase funding to higher education and Mississippi looks to join those state offering free tuition with a proposal for free community college through the creation of a Mississippi Works Scholars Program.

Alaska, Wyoming budgets highlight realities of dependence on the energy industry

Last March, SSTI reported  that energy dependent states are more prone to recessions than the nation overall and discussed how this plays out in battles over state budgets. In Alaska and Wyoming – two states where government services are heavily reliant on receipts from the energy sector – the FY 2019 budgets proposed by Alaska Gov. Bill Walker and Wyoming Gov. Matt Mead present two approaches to dealing with these issues.

In Alaska, Gov. Walker’s budget proposal voices frustration with the budgetary process. Facing a long-term structural budget deficit, the governor’s main proposal includes a significant decrease to the state’s Permanent Fund – which provides dividend payments from the state’s energy industry – to help address a roughly $2.5 billion budget gap.

In Wyoming, Gov. Mead’s proposed budget reduces funding to a variety of agencies, but requests nearly $40 million in new funding for projects that support technology-based economic development and industry diversification. SSTI covered this program, ENDOW, in detail last week.

Colorado

Bouncing back from last year’s anticipated $500 million hole, Colorado is projecting a general fund increase of 2.6 percent for FY 2019. Gov. John Hickenlooper proposes to increase higher education spending by $86.9 million, including $33.2 million to offset tuition increases and $5.0 million for a new effort to increase the number of high-demand credentials available in the state. Other proposals include restoring the Colorado Energy Office ($3.1 million), which sunset last year, extending the state’s advanced industry export incentive by five years ($175,000), and providing state funding for two broadband access staff ($224,992), who had been funded by federal grants. 

Florida

In the final budget proposal of his administration, Florida Gov. Rick Scott’s FY 2019 Securing Florida’s Future Budget requests increased education funding, including support for K-12 public education ($21.4 billion in proposed total funding) and higher education ($3.7 billion total in combined proposed funding for Florida colleges and universities). At the K-12 level, Scott proposes $15 million in new funding for a coding and computer science program targeted at the state’s middle and high school students.

In an attempt to “make Florida the most military and veteran friendly state in the nation,” Scott proposes $1.75 million to support veterans looking to obtain employment or start their own businesses: This funding includes:

  • $1 million to assist Florida businesses in training and hiring veterans; and,
  • $750,000 to support universities offering veteran entrepreneur training to create or sustain veteran-owned businesses.

Mississippi

Mississippi Gov. Phil Bryant’s budget proposal for FY19 recommends the creation of the Mississippi Works Scholars Program – a new $7 million program to provide free community college for an unspecified number of Mississippians. If funded, the Mississippi Community College Board would work in conjunction with the State Workforce Investment Board and other Mississippi workforce and economic development entities to develop the program details and determine workforce areas of need.

Bryant also proposes $400,000 in funding for Innovate Mississippi – a public private partnership to support innovation and tech-based economic development for the state of Mississippi. This proposed commitment would mark a shift from last year’s proposal which proposed to cut all state funding for the effort. The state legislature, however, appropriated $500,000 for the continued support of Innovate Mississippi.

Alaska, Colorado, Florida, Mississippi, Wyomingstate budgets