Federal, State, Local Budget Cuts Compounded by Shrinking Private Funds

EPI, Campaign for America’s Future and State Groups Release Reports Detailing Damage Caused by Bush Tax Cuts

Check for the report on the problems your state will face if the Bush tax cut goes through – and find out how to work to stop it.

A person can’t open a newspaper these days without catching sight of at least one article reporting on recent slashes in some local or state budget or in one of the many threads of the country’s social safety net. From coast to coast, over the course of just the last two weeks, cuts have been announced: Oregon Governor Ted Kulongoski (D) announced that several million dollars will be cut this year and next from the state’s Medicaid program, which had been heralded for its success in providing mental and dental benefits, in addition to the traditional hospital care, to Oregon’s poor, elderly, and disabled residents; newly-elected Maryland Governor Bob Erhlich (R) has proposed a $25 million cut in state-funding for child care for low-income parents – this is on top of a 70% cut in funds for Maryland’s Child Care Resource Centers Network, which provides families of all income levels with guidance and information on available local child care providers.

read in full

State-by-State Analyses Show State Budget Deficits? Impact

In addition to the National Priorities Project’s handy “State of the States” reports announced in the last Watcher, there is also a new set of fact sheets from AFSCME documenting the draconian cuts states have been forced to make to contend with their 3-year cumulative budget gap of $189 billion. A one-page fact sheet looks comprehensively at the cuts used by many states to meet their own constitutions’ mandates of a balanced budget. Some of the cuts recently used by states include releasing prisoners before completion of their sentences, cuts to higher education, increases in tuition at state universities, reducing funds for community services and child support enforcement, tightening eligibility requirements for the working poor and disabled for state Medicaid health plans, raiding state rainy day funds, and layoffs. Other state-by-state analyses will be available soon, which OMB Watch will note.

read in full

NPP Releases State of the States Report; ITEP Shows Who Pays

The National Priorities Project recently released two comprehensive reports that provide very useful state-by-state, as well as nation-wide, data. The Institute for Taxation and Economic Policy's Who Pays? A Distributional Analysis of the Tax Systems in all Fifty States shows that, on average, state and local tax systems require the poorest taxpayers to pay the highest effective tax rates.

read in full

State Fiscal Crises' More News is Bad News

Local news and national papers alike have been replete with the troubling real results of the growing state budget shortfalls. These stories have broken down the astounding figures – $65 billion and $70-$85 billion budget gaps in FY 2003 and FY 2004, respectively – into their real, daily effects on ordinary citizens. By now, Kentucky’s decision to release prisoners before their sentences were up has become the poster-child for desperate states and their drastic budget-balancing measures. In other similar high-profile cost-saving efforts, some school districts in Oregon and Colorado have turned to a 4-day school week; others have stopped buying new textbooks; still others have cut school athletic and marching band programs; in some districts in Oklahoma, the schools have stopped hiring substitute teachers and are, instead, looking to parents to fill in for teachers. According to the International Association of Firefighters, the state and local budget gaps have resulted in layoffs, station closings, and other reductions in staff, even as new Homeland Security Secretary Tom Ridge calls on local contributions for domestic security.

read in full

Why the Bush Plan is the Wrong Plan for US

This chart compares the Bush plan to the Democratic plans: the Baucus and Pelosi economic stimulus plans. To see what goes into a good economic stimulus plan, see this chart

read in full

Tax Cut Fever: What the Budget Future May Hold

With the shake-up in the Administration’s economic team, the recent rise in the unemployment rate to 6% (the highest rate in eight years), and absolutely no evidence that the massive Bush tax cut has done anything but send the federal budget on a rapid spiral into deficit, a reasonable person might think that it was time for the Administration to reevaluate the idea that tax cuts are the solution to everything. The President’s economic stimulus plan, currently in the design phase, however, is expected to consist of tax cuts aimed at corporations and individuals in the higher tax brackets.

read in full

Too Much Spending? Or Not Enough?

Only 9 billion dollars separates the House and the Senate Budget Committee FY 2003 discretionary spending totals, but this small divide has been widened by continuing efforts to limit spending on domestic programs. Each of the budget proposals that has been put forth calls for reductions in this year’s real per capita spending from last year’s levels. Yet a recent analysis from the Center on Budget and Policy Priorities (CBPP) argues that we are nowhere near a discretionary “spending explosion,” in either domestic or military spending.

read in full

'April Surprise' Turns Into July Fright As States Begin New Budget Year

Last Monday, July 1, marked the start of a new fiscal year for most states, many of which had to resolve large deficits after years of "April Surprises" -- the affectionate name given to the larger-than-expected influx of state income tax revenue each April 15.

read in full

States and Local Governments to Lose Funding for Many Programs

A new National Priorities Project report highlights the cuts slated for state and local governments under the President’s FY 2003 budget proposal. These cuts will only further complicate matters for the vast majority of states that are already contending with budget crises. For more on the cuts and there state-by-state impact, see the full NPP analysis. The analysis will continue to be updated over the next 2 weeks, and readers are encouraged to check the NPP website if they do not see their program area covered in the analysis and tables.

read in full

Estate Tax Repeal Sense of Senate Amendment Tacked onto Farm Bill

Estate Tax Repeal's Impact on States

A recent report from the New Jersey Policy Perspective (NJPP) illustrates the havoc the 2001 tax cut's repeal of the estate tax is wreaking on the already strained New Jersey budget. The report offers a state-level solution to the problem created by the federal estate tax repeal process, which actually ends the states' ability to "pickup" a portion of the federal tax for themselves earlier than the federal government's estate tax ends. The NJPP website also provides links to the 3 newspapers that have thus far endorsed its proposal, as well as an op-ed piece that ran in the New York Times New Jersey edition.

An update on the efforts of Sen. Jon Kyl (R-AZ) to repeal the estate tax.

read in full