Post by IDOCO on Feb 17, 2009 14:47:44 GMT -5
February 17, 2009
Busted budgets beyond our borders and how states are proposing to shore them up
Budget Barometer
If there is one consistent headline across the United States, it centers on the economic conditions of state budgets. The headline is not pretty. Nearly every state has critical budget shortfalls. In December, all but eight states had more expenses than income. January's revenues sliced that list to five. Today, the list has been whittled to three (Indiana, North Dakota and Wyoming). Indiana remains strong, but not without a cost.
To maintain a fiscally healthy Indiana, Governor Daniels has mandated spending reductions across state agencies. He has eliminated employee raises for 2009, yet kept the spot bonus and public service achievement awards programs, and has implemented the strategic hiring process. Each of these belt-tightening actions have prevented the state from having to implement the drastic steps that others have proposed. Such as:
Thirty-nine states have announced the curtailing of Medicaid programs.
Thirty-two states have slashed spending to K-12 and/or early education.
Seventeen states have enacted cuts to healthcare programs.
Just today (Tuesday), California is issuing pink slips for 10,000 state employees and the administration said it will halt the last 275 state-funded public works projects. Those projects include repairs and maintenance to 18 bridges and roads in Los Angeles County to shore them up from any future earthquake threats. In addition, tax refunds, welfare checks and other payments have been halted. The controller has hinted the state may issue IOUs, just to keep California solvent.
Georgia is proposing to repeal $428 million in property tax relief.
Kansas has suspended income tax refunds and may not be able to pay its state employees on time. In order to meet payroll, the state will need to transfer money from other accounts, but the move requires legislative approval. As of Monday evening, the approval had been refused. The state is also delaying tax cuts and suspending tax phase outs.
Minnesota plans to remove tens of thousands from its healthcare rolls.
States are enacting furlough measures for their workforce, while others are going directly to layoffs.
"We're seeing a hemorrhaging of state revenue right now," said Corina Eckle, finance director for the National Conference of State Legislatures. Overall, it is estimated that the combined deficit of state budgets will surpass $47.4 billion for 2009. More than half the state budgets are projecting budget gaps in excess of 10 percent for 2010. The total shortfall between now and 2011 is estimated at $350 billion, according to the Center on Budget and Policy Priorities.
Unlike federal government, state governments must balance their budgets. There are a limited number of options to get to that balance. Legislatures either have to raise taxes, borrow money from rainy day funds or make cuts. Across the country, all options are being utilized.
Note: In an effort to keep state employees aware of the serious crisis impacting state budgets across the United States, periodic e-mails will be sent, updating information contained in The Torch.
Busted budgets beyond our borders and how states are proposing to shore them up
Budget Barometer
If there is one consistent headline across the United States, it centers on the economic conditions of state budgets. The headline is not pretty. Nearly every state has critical budget shortfalls. In December, all but eight states had more expenses than income. January's revenues sliced that list to five. Today, the list has been whittled to three (Indiana, North Dakota and Wyoming). Indiana remains strong, but not without a cost.
To maintain a fiscally healthy Indiana, Governor Daniels has mandated spending reductions across state agencies. He has eliminated employee raises for 2009, yet kept the spot bonus and public service achievement awards programs, and has implemented the strategic hiring process. Each of these belt-tightening actions have prevented the state from having to implement the drastic steps that others have proposed. Such as:
Thirty-nine states have announced the curtailing of Medicaid programs.
Thirty-two states have slashed spending to K-12 and/or early education.
Seventeen states have enacted cuts to healthcare programs.
Just today (Tuesday), California is issuing pink slips for 10,000 state employees and the administration said it will halt the last 275 state-funded public works projects. Those projects include repairs and maintenance to 18 bridges and roads in Los Angeles County to shore them up from any future earthquake threats. In addition, tax refunds, welfare checks and other payments have been halted. The controller has hinted the state may issue IOUs, just to keep California solvent.
Georgia is proposing to repeal $428 million in property tax relief.
Kansas has suspended income tax refunds and may not be able to pay its state employees on time. In order to meet payroll, the state will need to transfer money from other accounts, but the move requires legislative approval. As of Monday evening, the approval had been refused. The state is also delaying tax cuts and suspending tax phase outs.
Minnesota plans to remove tens of thousands from its healthcare rolls.
States are enacting furlough measures for their workforce, while others are going directly to layoffs.
"We're seeing a hemorrhaging of state revenue right now," said Corina Eckle, finance director for the National Conference of State Legislatures. Overall, it is estimated that the combined deficit of state budgets will surpass $47.4 billion for 2009. More than half the state budgets are projecting budget gaps in excess of 10 percent for 2010. The total shortfall between now and 2011 is estimated at $350 billion, according to the Center on Budget and Policy Priorities.
Unlike federal government, state governments must balance their budgets. There are a limited number of options to get to that balance. Legislatures either have to raise taxes, borrow money from rainy day funds or make cuts. Across the country, all options are being utilized.
Note: In an effort to keep state employees aware of the serious crisis impacting state budgets across the United States, periodic e-mails will be sent, updating information contained in The Torch.