Misery in the States

July 09, 1991

There's one consolation for the nation's governors and state legislators. They all have the same problems that won't go away: Enormous mountains of debt, state constitutions that require balanced budgets and an unwillingness either to raise taxes or cut spending to achieve this goal on time.

The impact of the recession, after a decade of prosperity, has staggered state governments. Plunging revenues make it impossible to finance expanded social problems and maintain enlarged bureaucracies. The choices for legislators have proved so distasteful that some have simply refused to act. In Maine, Gov. John McKernan shut down most of state government for a week. In Connecticut, Gov. Lowell Weicker sent 20,000 state RTC workers home last week but relented yesterday after a stopgap budget was approved. Connecticut politicians remain at odds over a cumulative deficit of $2.8 billion.

Four other states -- Pennsylvania, North Carolina, Illinois and California -- still don't have budgets one week into the new fiscal year -- though that technically violates their local constitutions. The deadlock in nearby Harrisburg could last another week, a delay that already has meant no pay checks for 10,000 state workers and no state money for schools and social services.

Nearly everywhere, the outlook is the same. A number of states, including Maryland, agreed on budgets prior to the June 30 deadline. A handful of lucky states, including West Virginia, actually had surpluses, thanks to bold action to raise revenue and limit expenses in prior years.

Facing up to fiscal reality is proving excruciating. In California -- with a $14.5 billion deficit larger than any other state's budget except New York's -- it means a big jump in the sales tax and cuts in local aid and welfare benefits. In Connecticut, it could mean the state's first-ever income tax, if Mr. Weicker gets his way. For many localities, it means layoffs, park and recreation closures, fewer trash pick-ups and more levies.

States that have had the courage to raise taxes dramatically and downsize government may have seen the worst of this budget crunch. But for states such as Maryland, which have yet to bite the bullet on taxes or spending, this deficit crisis will persist.

These are difficult, heart-wrenching decisions for politicians to make. Many worthy social programs are no longer affordable. Higher taxes seem inevitable. But at least state legislators and governors are forced to confront these unhappy developments: The states don't permit debts to accumulate. If only Washington shared that perspective, the United States would not now be the biggest debtor nation in the world.

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