Report: State Budget Woes Likely to Get Worse
The Center On Budget and Policy Priorities put out a massive report last month that details the fiscal woes states are experiencing as the recession drags on.
The report found 48 states addressed or are facing budget shortfalls for the upcoming fiscal year 2010 totaling $166 billion or 24 percent of state budgets.
Worse, the data reveals a majority of states will face shortfalls in 2011 as well. The total gaps through 2011 could exceed $350 billion.
From the Center:
The states’ fiscal problems are continuing into the next year and likely beyond. At least 29 states have looked ahead and anticipate deficits for fiscal year 2011. These shortfalls total $38 billion — 8 percent of budgets — for the 21 states that have estimated the size of these gaps by comparing expected spending with estimated revenues, and are likely to grow as more states prepare projections and revenues continue to deteriorate.
… The budget shortfall figures for fiscal years 2010 and 2009 show the national recession’s impact on state budgets. These figures are the total size of the shortfall identified by each state listed. In many cases all or part of this shortfall has already been closed through a combination of spending cuts, withdrawals from reserves, revenue increases and use of federal stimulus dollars.
ABC News took a particular interest in the budget gaps that states closed or still need to close as a percentage of a state’s total budget and compiled a top 10 list.
- California – $53.7 billion shortfall or 58 percent of the budget
- Arizona – $4 billion shortfall or 41 percent
- Nevada – $1.2 billion shortfall or 38 percent
- Illinois – $9.2 billion shortfall or 33 percent
- New York – $17.9 billion shortfall or 32 percent
- Alaska – $1.35 billion shortfall or 30 percent
- New Jersey – $8.8 billion shortfall or 30 percent
- Oregon – $4.2 billion shortfall or 29 percent
- Vermont – $278 million or 25 percent
- Washington – $3.6 billion or 23 percent
It’s important to remember that unlike the federal government, many states (including Georgia) are required by law to operate on a balanced budget. If these states cannot otherwise balance their budgets, they have to make cuts in crucial areas like education and healthcare and reach deeper into reserves to make up the difference.
Again from the Center:
In states facing budget gaps, the consequences are severe in many cases — for residents as well as the economy. As the 2009 fiscal year ends and states plan for next year, budget difficulties have led some 39 states to reduce services to their residents, including some of their most vulnerable families and individuals.
For example, at least 21 states have implemented cuts that will restrict low-income children’s or families’ eligibility for health insurance or reduce their access to health care services. Programs for the elderly and disabled are also being cut. At least 22 states and the District of Columbia are cutting medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or significantly increasing the cost of these services.
At least 24 states are cutting or proposing to cut K-12 and early education; several of them are also reducing access to child care and early education, and at least 32 states have implemented cuts to public colleges and universities.
In addition, at least 41 states and the District of Columbia have made cuts reducing the size or work time of state government employees. Such cuts not only often result in reduced access to services residents need, but also add to states’ woes because of the impact on the economy from less consumer activity.
Georgia has a projected $3.9 billion budget gap for fiscal year 2010, which represents 22.3 percent of the state’s total budget. The state made cuts in areas affecting public health, the elderly and disabled, K-12 education, higher education, and the state workforce.