Friday, January 29, 2010

Governors’ 2011 Budgets Propose New Round of Cuts — Center on Budget and Policy Priorities

As states begin preparing for the third year of a fiscal crisis brought on by the recession, governors’ new budget proposals contain cuts to core services — like education and health care — and state workforces well beyond those they have already made, according to a new report from the Center on Budget and Policy Priorities. The proposals threaten to increase hardship and unemployment and weaken the economy by reducing overall demand.

Nearly half the governors have now submitted their budget proposals for the upcoming 2011 fiscal year, which begins on July 1, 2010 in most states. Due to the recession, states are already projecting a combined budget gap of $102 billion for the upcoming fiscal year, and that figure is likely to reach $180 billion.

“It will be harder than ever this year for states to balance their budgets without inflicting serious harm on vulnerable residents and the state economy,” said Nicholas Johnson, the Center’s Director of State Fiscal Policy and co-author of the report. “States will need to take a balanced approach that includes revenues, because these shortfalls are too big to close with cuts alone.”

Education, Health Care, Help for Poor and Disabled Among Proposed Cuts

While state legislatures must approve (and may significantly change) the governors’ proposed cuts, the new budgets demonstrate the scale of cuts that are likely to be needed, the report notes. They include:

* Arizona: cancellation of health coverage for 310,000 low-income childless adults and 47,000 low-income children, elimination of cash assistance for 10,000 poor families, and elimination of the Department of Juvenile Corrections.
* California: a $1.5 billion cut in K-12 and community college education funding, elimination of the state’s welfare reform program, and large Medicaid cuts.
* Hawaii: elimination of a program that provides financial assistance to poor seniors and people with disabilities, and layoffs for 1,200 state workers.
* New York: a $1.1 billion cut in K-12 education and $1 billion in cuts to payments for health care providers.
* Mississippi: a 9 percent cut in K-12 funding and a 12 percent cut to most agencies’ budgets.

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