- The Washington Times - Monday, December 30, 2002

When Jack Whittaker won the $314.9 million Powerball jackpot, there were two other unmentioned winners the sponsoring states of Missouri and Kansas. Missouri picked up an extra $12 million from increased ticket sales, while Kansas picked up a little less. But such unexpected state revenue increases are a slight and rare exception to the fiscal condition of the states. Kansas, for example has a billion-dollar deficit for the next 18 months. Overall, for the next fiscal year, the several states are anticipating deficits between $60 billion and $85 billion between 13 percent and 18 percent of their state expenses. Collectively, these are the biggest, projected state deficits in more than 50 years. And, along with cuts in spending and increases in taxes at the state level, starting in January the federal government will be pressured to help bail the states out.
Pity the poor governors who have the politically unenviable task of cutting popular spending programs and increasing taxes. In Kentucky, for example they are releasing prisoners early. Even Republican Govs. Mike Huckabee of Arkansas and John Rowland of Connecticut already have proposed big tax increases. While much of the states' plight is due to excessive state spending during the economic bubble period of the late '90s (which generated predictably unsustainable high revenue levels), the governors are also blaming Washington's unfunded state mandates in education, election reform, health care and homeland security. Congress and the White House should expect the governors to lobby them for an immediate $12 billion to help with the states' Medicaid expenses. The governors will be putting on a full-court press both through the media and through their state congressional delegations. It is finger-pointing time at the account-books desk and the desperate governors have long fingers. Already, the National Governor's Association executive director, Raymond Sheppach, is arguing that "It's a long-term structural problem," which is the traditional phrase used by incumbents to pass the blame from themselves to others.
Whether through improvidence, bad luck or both, unquestionably the states will be making a strong case for federal aid. But the federal deficit is already almost fated to skyrocket next year from the costs of prescription drug subsidies, under-estimated costs of domestic anti-terrorism preparations, Republican and Democratic Party tax-cut proposals, a possible Iraqi war spending spike, catch-up spending resulting from last years failure to pass a budget and fiscal pressure on the existing Medicare budget. Every one of these spending pressures will be supported by powerful arguments, even more powerful interests and millions of voting Americans. Add to the deficit watch the possible unexpected drop in government tax revenues should the economy turn sharply downward (caused either by a war or terror-related economic interruption or simply by a sputtering recovery.)
Irrespective of their theological views regarding the evils of deficits, next year there will be few Washington politicians who will be able to maintain their virtue on the topic. As the red ink spills in torrents across the landscape next year, if a politician or party points with alarm at the high red tide, the prudent citizen will want to check the ink barrel for telltale fingerprints. Our guess is that 536 prints will be found (435 congressmen, 100 senators and 1 president).

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