BATON ROUGE, La. — College students clash with administrators over steeply rising tuition. Public employees shut down statehouses amid cuts to pay and retirement benefits. Teachers and social welfare advocates protest budget cuts. Lawmakers struggle to cope with sharp declines in tax revenue.
If government budgets were once an eye-glazing topic, they moved to the top of the public agenda in 2011 as state and local governments faced some of their most difficult decisions since the national recession began in late 2007.
A fourth year of declining tax revenue meant deep spending cuts and, in many states, a rethinking of the role of government and the scope of the services it should provide.
Budget experts expect last year’s tumult to give way to somewhat steadier times in 2012, as tax revenue continues a slow rebound. But few budget planners are celebrating, as cautious optimism about an uneven economic recovery is leading to subdued expectations.
“There will be no restorations,” said Eileen Klein, chief of staff for Arizona Gov. Jan Brewer. “I hope we can eliminate that word from the budget vernacular.”
The end of a three-year state sales tax increase in 2013 and concerns about Medicaid expansion in 2014 driven by the federal health care overhaul has led the state’s Republican governor and GOP lawmakers, who have a majority in the Legislature, to say they must hold the line against new spending.
The cautiousness in Arizona is an illustration of the continued budget turmoil expected in 2012 throughout much of the nation, even after four years of deep spending cuts.
States have closed budget gaps totaling more than $500 billion since late 2007, with 48 states cutting programs and services. Louisiana, for example, recently trimmed subsidies that are provided to grandparents and other relatives taking care of children who are not their own, ended a program in 10 local jurisdictions to help people find jobs and sliced money for counseling services for at-risk children.
Republican Gov. Bobby Jindal cut public college funding another $50 million this month to help close the latest budget shortfall. Rising tuition has led to rallies on campuses across the country, including some protests that turned violent in California.
Adam Thongsavat, 22, expects the year ahead to be even more active on campuses. The student body president at the University of California, Davis, where campus police pepper-sprayed peaceful demonstrators last fall, said students are angry over rising tuition and a lack of job prospects once they graduate.
In his time as a student, he saw tuition and campus fees at the public university rise by nearly 68 percent, from about $8,000 in 2007 to $13,400 this year.
“I think 2012 will make even optimists pessimistic,” said Thongsavat, who recently graduated with a double major in history and political science. “I think what you’re going to see is a lot more unrest unless leaders in Sacramento, our regents and community leaders take active stances on improving student lives. We’re going to see a lot more of the same, and it’s going to get a lot worse.”
Federal stimulus money approved by Congress when the Democrats were in control helped during the heart of the recession, delaying layoffs of teachers and police officers while moderating cuts to Medicaid and other public health programs. Some states raised taxes and fees and tapped their rainy-day funds.
But even with a trickle of good economic news recently, state officials say no one should expect robust government spending anytime soon. Commitments still exceed incoming tax revenue in many states.
“It’s at a slow pace. But any improvement, no matter how small, is positive news,” said Todd Haggerty, a research analyst at the National Conference of State Legislatures.
Arkansas is among those states expecting to see a slight bump in tax revenue for the fiscal year that begins July 1, but it will not be enough to significantly restore funding to slashed programs and services. Worries about the strength of the economic recovery linger, making state officials hesitant to spend, said Richard Weiss, head of the Arkansas Department of Finance and Administration.
“There are a lot of clouds out there, and there’s a lot of headwind out there that we’re very concerned about,” he said.
Twenty-nine states are spending less from their general funds today than they did before the recession, according to a recent joint survey from the National Governors Association and the National Association of State Budget Officers.
More than 30 states have raised taxes since the recession began, but some of those increases were temporary and are expiring soon, as in Arizona. With the economy slowly reviving and unemployment rates dipping, many governors and lawmakers say they don’t want to jeopardize the recovery by raising taxes again.
But tax revenue is not expected to grow enough to make up for the impact of four years of dismal economic times. Rainy-day funds, internal transfers and other one-time sources have largely been tapped, so governors and lawmakers must look for new places to cut spending.
“They’ve done the easy cuts and only a few have budget reserves left,” said Elizabeth McNichol of the Center on Budget and Policy Priorities, a Washington, D.C.-based think tank. “There aren’t really things that are sacrosanct any longer.”
Changes to public employee retirement benefits and sweeping reforms to health care programs such as Medicaid are among the most likely targets.
At least 17 states project budget gaps for the next fiscal year, while a handful need to balance budgets in the remaining six months of the current budget year. The revenue of all 50 states combined remains $21 billion below 2008 levels, according to the National Governors Association-NASBO report.
Budget gaps in states projecting shortfalls in the 2012-13 fiscal year are estimated to total $40 billion. By comparison, California alone closed a deficit of $42 billion in 2009, during the worst of recession.
The nation’s most populous state is again facing budget troubles, but the problem appears more manageable than during the past few years.
Even so, Democratic Gov. Jerry Brown and state lawmakers have fewer options to close the $13 billion shortfall that is projected over the next 18 months.
In December, Brown ordered $1 billion in midyear spending reductions to public schools, universities and social services because tax revenue did not meet projections. The state has given school districts the option of slicing another seven days from the current school year, now 175 days long. That already is five days shorter than before the recession.
Low-income seniors and the disabled will get less in-home care when the reductions start in January. School advocates warn that an estimated 1 million students will have trouble getting to class with a drop in home-to-school transportation funding.
“The cut to transportation is absolutely devastating,” said Steve Henderson, a lobbyist for the California School Employees Association. “What that means is a lot of low-income and rural kids will not have the ability to get to school.”
Brown has proposed a 2012 ballot initiative to raise $7 billion annually through 2016 by boosting income taxes on individuals making $250,000 or more a year and increasing the state sales tax by a half-cent. He also has submitted a plan to the Legislature to revamp public employee pensions.
Washington state is considering similar cuts to cope with its shortfall, including shortening its school year, eliminating medical programs for 55,000 low-income residents and letting some low- and moderate-risk offenders out of prison early.
Missouri is reducing funding for elementary and secondary education to close a mid-year budget deficit tied to tornado recovery. North Carolina Gov. Beverly Perdue, a Democrat, is warning of thousands of teacher layoffs next fall because federal aid to local school districts is running out.
In Colorado, Gov. John Hickenlooper has proposed deep cuts to K-12 funding and higher education, largely because of a spike in Medicaid enrollment.
“This doesn’t make us happy,” said Hickenlooper, a Democrat. “I don’t see a way to get around it.”
Associated Press writers Mike Baker in Olympia, Wash., Paul Davenport in Phoenix, Andrew DeMillo in Little Rock, Ark., Judy Lin in Sacramento, Calif., Ivan Moreno in Denver and Gary Robertson in Raleigh, N.C., contributed to this story.
All this hate and discontentment just so the rich can keep all their money.
The greater the injustice, the greater the violence that will come to right it.
After reading this it seems perfectly clear that many of our budget woes would be easily solved if our tax base wasn’t destroyed by corporations outsourcing millions of jobs. It’s no wonder revenue is becoming an issue at all levels of government when unemployment is high, not to mention the millions of people who no longer receive unemployment and are off the unemployment radar.
Thinking back over the years one can to point to a series of very deliberate actions that lead us to this cliff. Ronald Reagan and Don Regan’s deregulation of all-things-corporate and trickle-down economics was the kickoff.
Then there was the NAFTA like trade agreements creating more incentives for jobs to leave this country. At first things seemed OK, but then not so much as the .com bubble burst and the realization that there where companies like Enron out there exercising their deregulated muscle, signs that something wasn’t right.
But those in Washington and their corporate cronies continued to insist that we needed more deregulated muscle because corporations will always act in their own best interests.
Then there was Bush. For all that he did, he was the guy who poured the concrete over everything
solidifying deregulation and all that went with it. He was the guy who was going to ensure the free market is free forever. During the Bush Imperium this country bled jobs in Bush’s free market free-fall at an ever increasing rate. We got to witness the flagship of capitalism founder in a trough and finally run aground as Wall Street got drunk on free enterprise. We got to witness the fruition of the Republican dream of deregulation bring its entire power to bear. Banks made up their own rules, gambled on mortgages they knew would fail, and turned bad loans into profit with junk bond and derivatives, bonuses abounded and the rich got richer.
As we entered the final four years of the Bush Imperium things continued to get worse. The experiment in “deregulation” and “anything for a buck” had created an out-of-control Frankenstein, aka the deregulated US economy. This monster spent all the money and is now broke. Then Bush decided to hand over the US Treasury to Frankenstein.
At the very end of Bush’s reign he turned over a huge chunk of cash to failed Wall Street
and the banks and we lost millions of jobs. His last month in office we lost 750,000 jobs; coupled with two unpaid-for wars and Medicare part D, that’s some serious jack.
Now he hands to keys to Obama. Two years later the same people who perpetrated the
deregulation disaster over the past 30 years are now in control of many of our states and they are trying to tell us that if we do more of the same things that got us into this position, things will get better; “trust us we’ve done this before.”
By eliminating jobs in the private sector we’ve caused reduced tax revenue which will mean reducing jobs in the public sector due to the lack of revenue we created in the private sector. But in order to make this all work we need to deregulate more and give the “job creators” a better tax break so they can continue doing more of the same…laying off working Americans.
Apparently those who support doing more of the same are proving the definition of insanity by expecting a different result.
Coming to a community near you.
University of California Berkeley (UCB) doubled the
fees and tuition charged to instate students. Faculty, chancellors must get a
grip on financial realities. Parents face mortgage defaults, 17% unemployment
(including those forced to work part time and those no longer searching), pay
reductions. UCB faculty receives pay increase: no faculty, chancellor layoffs.
It is especially galling to continue to generously
compensate chancellors/faculty while Californians make financial sacrifices and
faculty/chancellor, turnover is the lowest of public universities.
UCB wages must reflect California’s
ability to pay, not what others are paid. If wages better elsewhere,
chancellors/faculty/UCOP apply for the positions. If wages determine commitment
to UCB, leave for better paying position. The sky above Cal. will not fall.
The message sent by UCB Chancellor Birgeneau to
Californians, Alumni, donors and politicians is that the Chancellor has more
concern for generously paid chancellors/faculty than students and their parents.
Oust University of California Berkeley
Chancellor Birgeneau.
Email opinions UC Board of Regents Marsha.kelman@ucop.edu
UC Berkeley Chancellor Robert J. Birgeneau Must Put California’s
First.
I love University of California having been a student &
lecturer. Like so many I am disappointed by Birgeneau’s failure to arrest
escalating costs & tuition/fees. Birgeneau has doubled tuition and fees. On
an all in cost, Birgeneau molded UC Berkeley (UCB) into the most expensive
public university. Faculty, chancellor, administrator
salaries must reflect California’s
ability to pay, not what others are paid. Instate tuition consumes 14%
of a Californian’s median family income.
Paying more is not a better
university. Chancellor Birgeneau dismissed removing much inefficiency: require faculty
to teach more classes, double the time between sabbaticals, freeze vacant
faculty/administrator/chancellor positions, increase class sizes, freeze pay
and benefits & reforming pensions, health costs.
Birgeneau said
removing such inefficiencies wouldn’t be healthy. Exodus of faculty,
chancellors, and administrators: who can afford them?
Californians, Alumni agree
it is far from the ideal situation. Birgeneau cannot expect to do business as
usual: raising tuition/fees; granting pay raises & huge bonuses during a
weak economy that has sapped state revenues, individual income.
Recently, Chancellor
Birgeneau’s campus police deployed violent baton jabs on students protesting
Birgeneau’s increases in tuition. The sky above Cal. will not fall when Robert J. Birgeneau
($450,000 salary) is ousted.
Email opinions to the UC
Board of Regents marsha.kelman@ucop.edu