Magazine article State Legislatures

Recreating State Government

Magazine article State Legislatures

Recreating State Government

Article excerpt

A new crop of governors and legislators are confronting an old problem: dire state finances as the recession, officially ended in June 2009, drags on into a new fiscal year in the states. Federal stimulus funds are drying up. There will be $37.9 billion less in federal stimulus money next fiscal year than in FY 2011, and after that it will be gone. Congress has signaled it is closing the federal pocketbook to states. And the looming budget gap starting in July is pegged at some $82.1 billion, according to NCSL.

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True, tax receipts are on the upswing in some states, albeit slowly, but historically, states struggle to regain economic stability long after a recession ends, and collections are still about 12 percent below where they were before the recession began. After addressing budget gaps of some $89 billion last year and $174.1 billion the year before, there is little cushion left. As legislatures convened from Albany to Sacramento, state jobs, pensions, education, prisons and more were on the chopping block.

Here are some of the ideas being talked about in states as of late January:

* In New York, Governor Cuomo recommended $8.9 billion in spending cuts, including $1.5 billion to K-12 education and $982 million to Medicaid. He is demanding concessions from state employee unions and predicting 9,800 layoffs without them. He is also proposing a 20 percent reduction in the number of state agencies, commissions and authorities, improved tax collections, and an enhanced lottery as ways to plug the state's $10 billion deficit.

* California Governor Jerry Brown wants to cut $1. …

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