No Improvement for State Budget Crisis

Budget figures released recently by the American Legislative Exchange Council (ALEC) show a grim snapshot of a deepening fiscal crisis, as state budget deficits total nearly $95.2 billion for the remainder of 2003 and 2004.

Several states have already enacted or are considering a variety of tax increases.

'One must wonder when state budgets will begin to see the light of day,' said Michael Flynn, Director of Policy and Legislation for ALEC, the nation’s largest bipartisan organization of legislators. 'States continue to address deficits with a mix of spending cuts, tax increases and the use of one-time funds. But they’re using duct tape instead of fixing the plumbing.'

A recent New York Times report calls states 'desperate … they have tapped rainy day funds, raided tobacco money that was supposed to have provided health care for children and taxed every possible vice,' and says that lawmakers are making budget decisions that are no longer partisan or popular. The article includes a laundry list of ways states are cutting expenses and raising revenues, such as raising tuition at state colleges and universities, laying off teachers, reducing state healthcare benefits and cutting funding for the arts.

States that have or are expected to make significant spending cuts include Colorado, Iowa, Massachusetts, Michigan, Minnesota, New Hampshire, Tennessee, Texas, Virginia, Washington and Wisconsin.

States that have enacted or are considering tax increases include Alaska, Arkansas, California, Connecticut, Georgia, Idaho, Kansas, Maryland, Missouri, Montana, Nebraska, New Jersey, Nevada, North Carolina, Ohio, Pennsylvania, South Carolina and Washington. [ return to top ]