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States budget shortfall { April 21 2003 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2003/04/21/national/21ECON.htmlhttp://www.nytimes.com/2003/04/21/national/21ECON.html
April 21, 2003
States, Facing Budget Shortfalls, Cut the Major and the Mundane
By TIMOTHY EGAN
LINCOLN, Neb., April 18 — At a time when the governor of Missouri has ordered every third light bulb unscrewed to save money, when teachers are doubling as janitors in Oklahoma and working two weeks without pay in Oregon, when Connecticut is laying off prosecutors and Kentucky is releasing prison inmates early, the veterinarian crisis in Nebraska may seem like small potatoes.
Nebraska has dismissed two of its three state diagnostic veterinarians, meaning a rancher with a sick cow in Scottsbluff now has to drive the length of the state to see what's up with Nellie.
That cutback, the state equivalent of rooting for coins in a car ashtray, is a prime example of how far the pain of anemic state treasuries has spread — and not only in Nebraska, a state where almost 25,000 poor mothers have lost health care and where state college tuition has been raised 20 percent over two years.
Ranchers here have joined a chorus of wounded constituents pleading with state politicians to restore spending. From Lincoln to Honolulu, the reply has been the same: the till is empty.
The states are desperate, struggling with their worst financial crises since World War II. They have tapped rainy day funds, raided tobacco money that was supposed to have provided health care for children and taxed every possible vice.
Last year brought the storm warnings: some layoffs, the inconveniences of libraries closing early and roads without fresh asphalt. Now, as states scramble to find ways to cut nearly $100 billion this year and next from budgets that must by law be balanced, the cuts are much larger, and their effects profound.
It is not just that states are withdrawing health care for the poor and mentally ill. They are also dismissing state troopers, closing parks and schools, dropping bus routes, eliminating college scholarships and slashing a host of other services that have long been taken for granted.
These budget decisions are neither popular nor partisan, the people making them say. Nothing is off the table. Cities and states are stuffing slot machines into gas stations and lending basic services out for commercial bid.
In Pleasant Ridge, Mich., the police are considering a deal to allow companies to advertise on the sides of patrol cars in exchange for cheap vehicle leases. Police Chief Karl Swieczkowski said his budget-pinched force was ready to go ahead if the advertisements get legal approval.
"State governments are under siege," said Angela Monson, president of the National Conference of State Legislatures. "This is the real deal, and it's only going to get worse."
In Ms. Monson's home state, Oklahoma, teachers have driven buses, mopped the floors and even cooked cafeteria food, as support staffs for major school districts have been sharply reduced or eliminated.
A new library stands empty in Hawaii; the state built it but left no money for books. The bookmobile, the only library access for many in the islands, has already been cut.
Here in Nebraska, a museum of dinosaur bones and natural wonders dismissed its only full-time staff member, costing a swath of the prairie a cultural resource that has been around nearly since the Depression.
In a state that has vowed to try to hold onto its young people, a thousand University of Nebraska students have been told their financial aid is over, and 431 college positions were eliminated.
For Neil Obermeyer, a graduate assistant pursuing a master of fine arts here in Lincoln, the cuts mean he will probably leave school, and may go to California, where a good job prospect awaits, he said.
But for Jonathan Bradley, a disabled father of two, the cuts mean the end of medication that has kept him alive, said his wife, Mary. She works as a paralegal in Omaha, but the job offers no health insurance. The family had been eligible for Medicaid, the state-federal program for the poor and disabled. But to balance its budget, Nebraska raised the eligibility threshold by more than 30 percent.
"We even considered getting a divorce just so one of us would qualify," Ms. Bradley said. "What are we supposed to do, live in a tent?"
Measures that voters approved by wide margins — property tax exemptions for the elderly, teacher salary increases, new parks and open space — have been eliminated or suspended.
Washington State, which has the nation's largest ferry fleet with 25 million passengers a year, has announced plans to drop one of its most popular boats — a foot-passenger-only commuter ferry.
And in Texas, 275,000 fewer children will receive health care. The state already ranks first in the number of children without medical coverage. Ohio is planning to cut 50,000 people from health coverage, which would be the largest increase of uninsured Ohioans in history.
Colorado suspended property tax breaks for 120,000 elderly residents. The tax exemption had saved Carol DeBoer, who lives in suburban Denver, $486 a year.
"I'm just living one day to the next right now," said Mrs. DeBoer, whose husband has Alzheimer's disease. "We worked hard; we paid our taxes. If there is enough money for wars, shouldn't there be enough to help seniors?"
President Bush, who was the governor of Texas, is aware of the problems states are facing, aides said. But he made clear when addressing governors in February that no significant help was on the way from the federal government. "It's because we went through a recession and we're at war," he told the National Governors Association.
Governors point out that Mr. Bush was in his statehouse at a time of record prosperity. Now all but a handful of states have deep economic problems. On top of the recession, states are under new pressure to pay for domestic security and federal school mandates.
Education Is Not Spared
No matter their political stripe, governors and legislators used to be united in one way: they vowed to protect and enhance education. Last year's budget cuts largely spared schools. This year, layoff notices to elementary and high school teachers have appeared in more than a dozen states.
Colleges, the source of new jobs for so many states, have also been hit hard. Even money that was already allocated to colleges is not secure; the University of Oklahoma, for example, was told to return money to the state.
In college towns like Athens, Ga., for-sale signs are ubiquitous.
"You can go around town and see houses for sale that have been empty for months," said Dr. Kristin Boudreau, an associate professor of English at the University of Georgia, which has had a hiring freeze for more than a year.
For administrators, the choices are either to raise tuition or drop staff members. Some are doing both.
The University of Iowa increased tuition by 18 percent — the largest increase in two decades.
In Nebraska, rising tuition and staff cuts sparked a big protest at the Capitol last month. Among those objecting to the cuts was a former quarterback for the University of Nebraska's football team, Steve Taylor, who said tuition increases would make it hard to keep young people in the state, which has an aging population.
The university has been told it will lose the research division of the state museum, where woolly mammoth bones and other prehistoric artifacts draw thousands of tourists.
"Prospective students are talking about not coming here because they are not sure their programs will be here," said Joe Rowson, a spokesman for the university, which has 42,000 students at four campuses.
Nebraska has a $761 million budget shortfall. "Education has been the target," Mr. Rowson said, "even though most of our state leaders know this could do some real long-term damage to the state."
But Gov. Mike Johanns, a Republican in a Republican-dominated state with the nation's only unicameral legislature, said the budget hole was too deep to protect things that most people want.
At the elementary school level, class sizes are increasing in many states as teachers are dismissed. Often, it is the music teacher or special education expert who is the first to be cut, educators say.
Oregon has been hit particularly hard. In Portland, in a last-minute effort to keep schools open for the full school year, teachers agreed to work two weeks without pay — the equivalent of a 5 percent pay cut.
School districts in parts of Colorado have gone to four-day weeks to trim costs. In Idaho, where the Republican governor, Dirk Kempthorne, has proposed a tax increase to stem further cuts, towns have held bake sales and auctions to keep teachers on staff. Teachers in Twin Falls gave up a day's pay to pool enough money to keep a hearing specialist on staff.
In California, the most populous state with the largest budget hole, about $30 billion, layoff notices have been sent to 25,000 teachers, although not all of them will be laid off.
The cuts affect rich and poor districts alike. Summer school will not open for elementary students in San Francisco, and the Laguna Beach school district has announced layoffs of a third of its teachers.
But schools have been squeezed the most in the Plains. Half the school districts in Kansas have cut staff. At two elementary schools, students emptied their coin jars to keep nurses and foreign-language teachers.
"Morale is so low, many teachers are leaving the profession," said Carolyn Crowder, president of the Oklahoma Education Association. In her state, a thousand students have lost bus service, custodial staffs have been slashed and class sizes have increased — all part of an across-the-board cut of about 9 percent.
"We've got students and teachers cleaning the classrooms, parents bringing in furnishings and materials and no more substitute teachers," Ms. Crowder said.
The states that have had to pare teachers and programs say their situation will only worsen as they try to meet the goals of new federal legislation that requires schools to raise standards or risk losing federal money.
The Rainy Day Arrives
The states were flush in the 1990's. The stock market was rolling, incomes were rising and tax receipts soared. Most states chose to give much of the money back in tax cuts at the same time they followed voter directives to spend more on popular concerns like schools, parks and care for the elderly and poor.
Tax rates dropped in 43 states in the 1990's, and many states passed laws that would make it difficult to raise taxes again. It seemed to many that the good times would never end. Still, 42 states put money into rainy-day funds.
Critics said the states could not pander to voters' wishes for good schools and fully financed Medicaid systems while still slashing taxes. The states seemed convinced that they could.
According to an analysis by the Cato Institute, a conservative-leaning organization, spending from the states' general funds rose an average of 5.7 percent a year between 1990 and 2001, nearly double the inflation rate.
At the same time, taxes were cut sharply. For seven years, ending in 2002, a majority of states had net tax cuts.
The two largest areas of state spending, Medicaid and education, are now taking the brunt of the cuts, with prisons not far behind.
But critics say the states should not have promised to raise teacher salaries, say, or provide health care for the working poor, only to turn around and cut those areas now.
Colorado is cutting Medicaid benefits to more than 3,500 legal immigrants, including 120 nursing home residents.
"Without medicine, I will die," said Aleksandr Nukhman through a translator. A 78-year-old Russian immigrant, Mr. Nukhman learned he had prostate cancer last year. He takes 13 medicines daily; his tiny apartment's kitchen table is covered in orange prescription bottles filled with large purple and little pink pills. His other ailments include diabetes and high blood pressure.
Medicaid has paid all his medical bills so far. He does not know how much his medications cost, but says he has no extra money to pay for them on his own.
As the economy staggered, the states turned to their reserve rainy day funds, took settlement money from tobacco companies and used it for general purposes and raised taxes in the areas considered least likely to be politically harmful.
That was in 2001 and 2002. Now the cuts are much larger, and much more unpopular politically. Tax receipts, instead of turning around, have only become worse. States are letting historic sites fade away, or not encouraging new art. In Arizona, for example, plans are under way to eliminate the arts commission.
"It's kind of stunning to be on that list," said Shelley M. Cohn, executive director of the Arizona Commission on the Arts, which supports nonprofit arts organizations like the Arizona Opera Company and the Phoenix and Tucson symphonies and works with small arts groups.
"Yes, these are hard times, but we have worked for three decades to change the perception that Arizona is a cultural wasteland," Ms. Cohn said. "To attract the knowledge workers, the business and the level of tourism that Arizona wants to have, we have to maintain an arts community that is high quality."
Ms. Cohn called public support of the arts a "small but mighty" investment, because it identifies deserving arts organizations and encourages private donors to support them.
In Indiana, the cutbacks mean some people cannot return to a favorite park, or camp within the state. Indiana has closed some campgrounds, eliminated a beekeeper inspection program and a program that provided folk music and story-telling at state parks.
And the state will no longer pay for upkeep of 14 historic sites, including the childhood home of Ernie Pyle, the World War II reporter.
"If there's a leak in the roof, the solution is, get a bucket," said Stephen Sellers, a spokesman for the Department of Natural Resources.
In tiny communities, the cuts can make a huge difference, residents say. The only public swimming pool in Crawford County, in southern Indiana, will be closed because the state cannot afford $1 million in repairs.
Tax Increases Not Enough
At the depth of their desperation, some states with strong no-new-tax traditions raised taxes. Nebraska's legislature last year overrode a veto and raised income taxes and other fees. It is still not enough, and across-the-board slashing has been ordered to fill the shortfall.
Gov. Bob Taft of Ohio, a Republican with a family name synonymous with low taxes and streamlined government, proposed a tax increase to comply with court orders to finance schools adequately. But the legislature rejected it, prompting a round of cuts.
At least 15 states have raised taxes, five of them by 5 percent or more. Other states are turning to gambling, but are finding that the market has gone somewhat soft.
What the states are left with now, in some cases, are extreme measures, and infighting.
In Illinois, some prisons have been asked to reduce pharmaceutical costs by ordering more potent prescription drugs, and then splitting them in half.
In Washington State, after legislators said they would have to renege on a promise to raise the salary of home health care workers to $8.70 an hour from $7.86, the Senate majority leader, James West, a Republican, complained that the health care workers were "perpetual pathetics" who were always whining.
In response, the workers union produced a woman, Sherry Beebe, who had cared for Mr. West's ailing mother.
"I was one of the workers who took care of your mom," said Ms. Beebe in a letter to Senator West. "Stop being so selfish and think about where you would be if you had to care for your mom for almost no pay or benefits."
The bitterness is closer to the land in Indiana, where Mary Craft, 58, and her husband, Oliver, 56, say they can no longer afford to camp in their home state, where they used to spend nights at Shakamak State Park or Lake Monroe with some of their 10 grandchildren.
"Our wiener-roasting days are done," said Mrs. Craft, who lives in Gosport. Camping fees have risen to $23.50 a night, from $12, she said.
"There's no sense in that," she said. "Anything that was affordable, now they're just raising it up to where an ordinary person can't afford it."
Copyright 2003 The New York Times Company |
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