Budget situations dire in several states

• Article
• Comments ()
• Click-2-Listen
• Videos

By Andrew Welsh-Huggins ASSOCIATED PRESS

COLUMBUS, Ohio | Several states are facing the prospect of government shutdowns and program cuts as they enter the first weekend of the fiscal year and the Fourth of July holiday without budgets in place.

"This downturn, even more so than previous downturns, really is affecting every state right now," said Brian Sigritz, a staff associate with the National Association of State Budget Officers.

The Washington-based organization said 42 states wrestled with budget deficits this spring - the most since it began tracking budgets 30 years ago.

States weathered similar problems in the recessions of the early 1980s, 1990s and earlier this decade. The confluence of so many problems hammering the economy at once makes the present situation seem dire.

"Numerous things look worse than some past recessions," said Bert Waisanen, a fiscal analyst with the Denver-based National Conference of State Legislatures. "The housing market is worse. Industrial production is worse. Wages are nearly worse."

The cutbacks at the state level are having national repercussions, dragging down the economy and adding to jobless rolls and wage stagnation. The Labor Department reported Thursday that the nation's unemployment rate reached 9.5 percent in June - the highest level in 26 years.

The sputtering economy has also created an across-the-board drop in tax collections for state coffers. Taxes ranging from sales to personal income to property are all down, Mr. Sigritz said.

California Republican Gov. Arnold Schwarzenegger declared a fiscal emergency and ordered state offices closed three days a month to save money as state officials began paying bills with IOUs on Thursday.

The failure of Sacramento lawmakers to act this week also widened California's deficit from what already had been a whopping $24.3 billion - more than a quarter of its general fund.

Deep budget cuts have already forced California school districts to cancel summer school programs, a move that has affected, among others, elementary and middle school students in Los Angeles, which has the country's second-largest district.

School officials in Florida, North Carolina, Oregon and other states have also cut or limited summer classes.

North Carolina's budget crunch apparently was not bad enough to persuade lawmakers to work through the holiday weekend. House and Senate negotiators in Raleigh said Thursday they will go home rather than iron out differences in taxes and spending, despite Democratic Gov. Beverly Perdue's stern advice to finish the budget.

Pennsylvania schools still don't know how much state money they will receive and may have to reopen their budgets to add or subtract spending. The state's budget year began Wednesday with no sign of a deal between Harrisburg lawmakers and Democratic Gov. Ed Rendell.

Ohio Gov. Ted Strickland, another Democrat, and Columbus lawmakers are stymied over a proposal to allow casino-style gambling to raise money. As a result, the state started its budget year with a one-week temporary budget.

That interim spending plan was already putting a strain on some social service groups.

The state food pantry agency has only $163,000 available to spend on produce this week. The group spends $400,000 a week at the height of Ohio's harvest.

"This budget impasse is impacting real Ohioans," said Lisa Hamler-Fugitt, executive director of the Ohio Association of Second Harvest Food Banks. "People for the first time in their lives are now finding themselves standing in the food line because they've lost their jobs, their incomes aren't stretching."