State after state, budget crises loom

Hundreds of thousands nationwide are protesting against state budget shortfalls that could fall on the backs of working families including those at risk of losing badly needed human services at a time where jobs are scarce and unemployment, homelessness and hunger are on the rise.

In state after state services and programs for children, seniors and working families could be slashed due to the economic recession. Pro-people agencies and community advocates in cities nationwide want state lawmakers to target big corporations and the super-wealthy with a tax increase in order to save jobs and community programs.

As elected officials continue to wrestle over state budgets most low income communities and the working poor are the ones who stand to lose the most.

In Illinois some 40,000 seniors and persons with disabilities could lose their homecare workers and 100,000 workers face jobloss if lawmakers enact a “doomsday” budget. Eighty thousand working mothers would lose subsidized childcare. Rape crisis, drug rehabilitation and violence prevention programs are all on the chopping block. Services for youth such as college aid, juvenile delinquency prevention and teen pregnancy prevention programs could be lost.

For example, on top of the all that has been slashed by the passed budget, Ill. lawmakers said last week that it would temporarily stop paying about $15 million a year for about 10,000 funerals for the poor. Meanwhile, Oklahoma plans to cut back hours at historical sites and museums, New Hampshire wants to sell 27 state parks and Washington is laying off thousands of teachers.

State revenues continue to decline as the U.S. economy struggles with the worst recession in 60 years. Governors and legislatures are in the midst of approving budgets and all but four states nationwide must have new ones in place by July 1.

Alabama, Michigan, New York and Texas are the only states where the fiscal year does end in June.

State employees in Hawaii are preparing for furloughs of three days a month over the next two years. Lawmakers in Idaho want to reduce aid to public schools and force pay cuts for teachers.

California has a $24 billion deficit on its hands in the coming fiscal year and many argue people there have the most to lose. Last month California voters rejected a ballot measure that would have increased taxes, borrowed money and reapportioned state funds. Democratic legislative leaders offered Republican Gov. Arnold Schwarzenegger alternatives to his recommended cuts, including levying a 9.9 percent tax on oil extracted in the state and increasing a tax on cigarettes to $2.37 a pack from 87 cents. Schwarzeneggar says he plans to veto any budget that includes new taxes and has proposed releasing thousands of prisoners early and wants to close more than 200 state parks.

Maine plans to increase taxes on candy and ski tickets, Wisconsin on oil companies and Kentucky on cellphone ring tones and alcohol.

According to a recent report by the National Conference of State Legislatures, states nationwide are expected to face a $121 billion budget gap in the coming fiscal year, compared with a $102.4 billion this year.

“These are some of the worst numbers we have ever seen,” said Scott D. Pattison, executive director of the National Association of State Budget Officers to the New York Times. Pattison added federal stimulus money that began flowing this spring was the only thing preventing widespread paralysis, particularly in the areas of education and health care. “If we didn’t have those funds, I think we’d have an incredible number of states just really unsure of how they were going to get a new budget out,” he said.

Pattison’s group did a survey recently that found personal income tax collections are down by about 6.6 percent compared with 2008. Sales tax collections have decreased by 3.2 percent and corporate income tax revenues by 15.2 percent. The survey concludes that governors are recommending increasing taxes and fees by some $24 billion for the coming fiscal year on top of more than $726 million they sought in new revenues this year.

Despite federal stimulus funds, elected officials in at least 19 states are still struggling to negotiate budgets. Many political leaders continue to find themselves at odds with their own political parties. Meanwhile critics and state funded non-profit human advocacy groups are demanding that politicians stop politicking and put the needs of working people front and center.

Republican Gov. Tim Pawlenty of Minnesota said he would unilaterally cut a total of $2.7 billion from nearly all government agencies and programs that receive state funds after he and Democratic leaders failed to agree on balancing the budget.

Susan K. Urahn is the managing director of the Pew Center on the States. “Legislatures have never dealt with a recession as precipitous and rapid as this one,” she told the NY Times. “They’re faced with some of the toughest decisions legislatures ever have to make, for both political and economic reasons, so it’s not surprising that the environment has become very tense.”

Even if the recession ends, as some economists predict, Urahn foresees more of same in the next period as unemployment numbers continue to rise. Because so many people are out of work, tax collections will still feel the pain, not to mention the increasing demand for Medicaid, one of the states’ highest expenses, she said.

“Stress on the Medicaid system tends to come later in a recession, and we have yet to see the depth of that,” said Urahn. “So you will see, for the next couple of years at least, states really struggling with this.”

Health care advocates argue that now more than ever is the time why people should support President Barack Obama’s plan to reform the health care system that would allow a federally funded public option for those who otherwise can’t afford private health insurance.