State Budgets Get More Grim

The Center on Budget and Policy Priorities has updated its report on state budgets. Not surprisingly, the news is pretty bad. According to the Center, ...
by | May 13, 2009
 

Graph The Center on Budget and Policy Priorities has updated its report on state budgets. Not surprisingly, the news is pretty bad.

According to the Center, all but three states are facing shortfalls during the current budget year or the one beginning July 1. A total of $59 billion in shortfalls for the current year has opened up in 42 states and Washington, D.C., while budget deficits are already projected in 46 states for the coming fiscal year.

In total, the gaps for this year through fiscal 2011 will be in the $350 to $370 billion range. That's in line with what the National Governors Association is saying. That means the $140 billion or so in federal stimulus money that states can use to plug deficits will only cover about 40 percent of the hole.

The group cites the expected causes -- declines in property, sales and income taxes. These will be slow to turn around even as the economy begins to recover. CBBP, which is a liberal group with reliable numbers, says that 16 states have raised taxes or other revenue this year and recommends more "as a means of minimizing harmful budget cuts."

In a companion study, CBPP outlines some of the cuts states have already made. About 15 states have been able to use stimulus money to cancel planned budget cuts.

But the cuts continue to happen. According to the report, 19 states have implemented public health programs; 20 states have cut programs for the elderly and disabled; 21 states are cutting K-12 education funding; at least 30 have cut money for higher ed; and at least 39 states and the District have enacted state workforce cuts, such as hiring freezes, wage reductions, layoffs and salary caps.

The states that have made cuts in all five of these categories this year include the expected housing bubble Sunbelt states of Arizona, California and Florida (Nevada apparently has so far spared services for the elderly and disabled), along with Maine, Maryland, Rhode Island, South Carolina and Utah.

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