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POLICY INSIGHT
BEYOND THE NUMBERS

State Budget Problems Are Hardly Partisan

Talk about seeing the world through rose-colored glasses. Michael Gerson writes in today’s Washington Post, under the headline of “Blue-State Budget Crises,” that “massive state budget shortfalls” are “concentrated” in “predominantly Democratic states.”  Well, no.  Actually, fiscal distress is as nonpartisan as the recession itself.  Republican-dominated states like Arizona, Georgia and South Carolina all faced budget shortfalls for the current fiscal year equal to more than one-quarter of their budgets, as did the “swing” states of Maine, Minnesota and Nevada. Meanwhile, Gerson praises red Indiana for its more modest budget shortfall, but ignores Massachusetts, which dealt relatively responsibly with its budget shortfall the previous year with a mix of revenue increases and spending cuts and as a consequence had an even smaller shortfall. Looking forward to 2012, Maryland’s newly re-elected Democratic governor and Democratic legislature face a shortfall of 11.1 percent.  Texas’ newly re-elected Republican governor and Republican legislators face a shortfall twice that high – 22.3 percent.  And I suppose we should remember that California’s Republican governor and its Republican minority are just as much to blame for that state’s ongoing problems as its majority Democrats, due to the state’s rule requiring a supermajority to pass spending bills (a rule that was repealed last week). What’s really going on here is the lousy economy.  States hardest-hit by foreclosures and high unemployment – those in the Southeast, the Southwest, New England and parts of the industrial Midwest – have had the biggest budget problems.  States whose economies are based to some extent on oil and gas production are much better off. Gerson says this sets up a dynamic where Democratic governors will be begging the new Republican House for more aid.  What’s a lot more likely is that all governors are going to be mad when they see what the new Republican majority has in mind for existing programs run through state government.  As my colleagues Jim Horney and Iris Lav wrote yesterday: A proposal by House Republican leaders to cut non-security discretionary spending by more than 20 percent in fiscal year 2011 could reduce federal funding for programs operated by state and local governments by $32 billion, substantially reducing the ability of those governments to provide crucial services to millions of American. Such cuts would make state budgets worse off, and slam the economy.  That’s enough to make any governor see red.