States Mend Budgets Warily
ST. LOUIS — After three years of financial crisis, states across the nation report a turnaround: Tax revenue is coming in strong. Crippling budget deficits have largely been erased.
With the new fiscal year two weeks away, 32 states are predicting surpluses.
So why are parents and immigrants and senior citizens so worried?
They're fearful and frustrated because in most states the emerging economic recovery has not translated into more funds for the services they depend on. To-the-bone cuts in education, healthcare, parks, road repair and other programs have not been reversed.
Corporate executives are frustrated too because the tax and fee increases passed in grimmer times have not been rolled back. "We've had to spend most of our time making sure things don't get worse," said Todd Maisch, a vice president of the Illinois Chamber of Commerce.
In some states, the austerity budgets reflect conservative principles, as politicians continue to shrink government even when revenue rebounds. In others, the cautious spending plans are a painful concession to reality: Balance sheets look much better than a year ago, but given how bad last year was, that's not saying much.
"Better is relative," said Iris Lav, deputy director of the Center on Budget and Policy Priorities, a liberal think tank in Washington. "Revenues are exceeding expectations in part due to how low the expectations were."
A few of the best- and worst-off states have significantly adjusted their 2004-05 budgets.
The Mississippi budget was so tight lawmakers eliminated some health insurance benefits for 65,000 elderly residents earning as little as $7,000 a year. Massachusetts stopped relief payments of $303 a month for impoverished immigrants.
In California, Gov. Arnold Schwarzenegger has proposed raising college fees, cutting aid to local governments and eliminating some hot meals for prison inmates, even as the state borrows $15 billion to pay operating expenses.
On the flip side, Florida banked such a healthy surplus that lawmakers cut corporate taxes and funded a new literacy program that would send reading coaches into hundreds of classrooms. Arizona will spend heavily on full-day kindergarten. Virginia will expand subsidized preschool.
But such bold moves have been relatively rare this spring. In most state capitols, lawmakers have stuck with hold-the-line budgets that give few constituents much reason to cheer.
