Some states' money crisis just starting

July 27, 1993|By New York Times News Service

After three years of painful and protracted budget battles, states for the most part approved spending plans this spring and summer with relative ease -- if not resignation.

But the pain has just begun for many states, according to a study made public yesterday by the National Conference of State Legislatures at its annual meeting in San Diego.

The study, which provides the first look at how the states completed the last fiscal year and are beginning the new one, noted that with few exceptions elected officials enacted spending plans that did not address the fastest-growing budget areas: corrections and health care.

Moreover, these two programs will consume nearly 20 percent of all state spending this fiscal year, up from about 14 percent five years ago.

Ronald K. Snell, director of the conference's fiscal program and the main architect of the study, said there were two major opposing forces on the fault line running through state budgets. On one side is the inexorable growth in the cost of punishing criminals and of providing health care for the poor under the federally subsidized Medicaid program, of which most states pay about 50 percent.

On the other side, he said, there is the reluctance of voters to increase taxes for programs like prisons that do not seem to work or have any bearing on their lives.

Fiscal experts say most states have done little to control health care costs because they have been waiting for a national plan. President Clinton delayed making his health care proposal until this fall, saying Congress was preoccupied with the budget and deficit reduction plan.

"People should have laughed hysterically at that," said Brian M. Roherty, executive director of the National Association of State Budget Officers. "It is totally and completely absurd to have a federal budget that does not address health care, which is the most profound structural problem in federal and state budgets."

The delay in dealing with health care policy has its most apparent effect on higher education. Since 1990, states have shifted $7.7 billion in costs to public colleges and universities, which have responded by raising tuition and laying off faculty and staff members in most states.

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