http://www.latimes.com/news/nationworld/nation/la-na-statecuts8-2009feb08,0,457898,full.story
February 8, 2009
Los Angeles Times
States' only option now is budget pain
By Ashley Powers and Richard Fausset
Healthcare, parks, schools: Politicians' proposals to close budget gaps
would hit where it hurts. Even zoo animals may not get a break.
Reporting from Atlanta and Las Vegas -- They have plundered reserves,
enacted hiring freezes and engaged in all manner of budgetary voodoo to
shield us from the pain.
But now state governments -- reeling from a historic free fall in tax
revenue -- have run out of tricks. And Americans are about to feel it.
In some cases, they already have.
Nevada resident Margaret Frye-Jackman, 71, was diagnosed in August with
ovarian cancer. She had two rounds of chemotherapy at University
Medical Center, the only public hospital in the Las Vegas area.
Soon after, she and her daughter heard the news on TV: The hospital's
outpatient oncology services were closing because of state Medicaid
cuts. Treatment for Frye-Jackman and hundreds of other cancer patients
was eliminated.
Luckily, Frye-Jackman's gynecological oncologist, Dr. Nick Spirtos,
decided to open a tiny chemotherapy center in his office's empty
storage room.
Today, he treats Frye-Jackman there, along with about 20 more cancer
patients who were dumped by the hospital. Frye-Jackman's care is paid
for with Medicare and supplemental insurance, but other patients can't
cover the cost of full treatment. The doctor has considered putting
donation boxes in the lobby.
"If this is what it's like in Nevada, with cancer stuff closing, is it
like that everywhere?" said Frye-Jackman's daughter, Margaret Bakes,
accompanying her mother to the doctor's recently. "Are all the other
states closing stuff too?"
The answer, in at least 39 states, is "yes" -- or "soon." With
personal, sales and corporate income tax revenue plummeting, state
governments -- which recently trimmed their budgets to cover a
cumulative $40.3-billion shortfall for the current fiscal year -- are
now watching in horror as a $47.4-billion gap opens for 2009.
And for fiscal year 2010, they will face a $84.3-billion hole,
according to the National Conference of State Legislatures. The total
shortfall through fiscal 2011 is estimated at $350 billion, according
to the Center on Budget and Policy Priorities, a nonpartisan think tank
in Washington.
Unlike the federal government, nearly all states must balance their
budgets. So legislatures either have to raise taxes, borrow money from
dwindling rainy-day funds, or cut. The last option is becoming
increasingly common.
"The easy budget fixes are long gone," Corina Eckl, fiscal program
director for the National Conference of State Legislatures, said in a
statement. "Only hard and unpopular options remain."
State lawmakers can expect some relief from the federal stimulus
package -- but it is far from a cure-all. The version passed by the
House of Representatives would cover only about 45% of the projected
state deficits. A Senate version of the bill, which has yet to be
approved, would, in its present form, offer even less relief.
The budget-cutting plans that have emerged from state capitols so far
have a potential effect on almost everyone. Parks will close.
Environmental programs will be scaled back. Bus and ferry routes will
shut down, possibly sending more drivers onto clogged streets and
highways. Schools may go without school nurses, and classes may become
more crowded. Sick people who rely on state health programs may instead
get sicker.
Washington state's predicament illustrates the brutal reality lawmakers
are facing in the hardest-hit states. Washington's budget gap for 2010
will total 18.5% of its general fund, making it the sixth-worst
situation in the nation. (Nevada is facing the most serious shortfall,
with a 38% gap; California's 22% gap is the fourth-worst, behind
Arizona at 28% and New York at 24%, according to the National
Conference of State Legislatures.)
The Evergreen State must close a $5.7-billion shortfall in the next two
years. Raising taxes there, as in many other states, continues to be an
unpalatable strategy for politicians: Democratic Gov. Chris Gregoire,
amid a tough reelection bid last year, made a no-new-taxes pledge and
appears to be sticking to it.
That leaves lawmakers in the Olympia statehouse slugging it out over
what to cut.
The governor has proposed pay freezes and layoffs for teachers and
other state employees, a $350-million reduction in funding for higher
education, closure of 13 state parks, early release for low-risk
prisoners, and a 42% reduction in the state's popular health insurance
program for the working poor -- a program that provides last-resort
coverage to 104,000 people.
The plan also would eliminate cash grants and health insurance for
about 16,000 state residents who are temporarily disabled. The proposal
wasn't some exaggerated public relations ploy to lure federal stimulus
cash: In fact, it already factors in about $1 billion in federal aid.
The reality has been sobering for a state that has prided itself on
generously funded social programs.
"The cuts are incredible. They absolutely shred our healthcare system.
I think you'll instantaneously see 60,000 more uninsured in our state,"
said Cassie Sauer, spokeswoman for the Washington State Hospital Assn.
"They'll probably get sicker, and some of them will die."
Others across the nation are also coming to grips with disappearing
services.
In Florida's Broward County, six to 10 drug-addicted women convicted of
nonviolent crimes are stuck in jail and waiting to be admitted, along
with their children, to a family drug recovery center whose budget has
been slashed. They have been given probation contingent on admission to
the center, but there's no room for them.
All 16 family slots at the Susan B. Anthony Recovery Center are full.
Seven other slots were eliminated when the center lost $51,000 in
funding. Ironically, the result could be a net financial loss to
Florida. The center says it saves the state $3 for every dollar spent
because it keeps women out of jail and their children out of foster
care.
"You pay now, or you pay double later," Executive Director Marsha
Currant said.
In the hamlet of Tubac, Ariz., residents are wondering whether state
cuts will render it a ghost town. It's a community of 2,000 people and
120 artists' studios about 50 miles south of Tucson. The main lure for
visitors, and their dollars, is Tubac Presidio State Historic Park,
which preserves the remains of a 17th century Spanish settlement.
But after the Legislature lopped $1.6 billion off this year's budget,
the state announced that the park could close as soon as this month.
"Tubac, like the rest of the state, is so dependent on tourism
dollars," said Carol Cullen, executive director of the Chamber of
Commerce. "To close it is crazy."
Arizona is expected to close eight state parks -- nearly a third of its
total. Parks Director Ken Travous described the situation as "between
brutal and absolute carnage."
In New York, the state's 76 zoos, aquariums and botanical gardens are
bracing to lose all of their state funding next year, under a proposal
by Democratic Gov. David Paterson. Those cuts, combined with a loss in
the value of their endowments and fewer membership renewals, could
result in reduced visiting hours, slashed educational programs, higher
admission prices and deep employee layoffs.
Animals will pay the price, said Jon Dohlin, director of the New York
Aquarium. Some won't be replaced when they die, and others could be
sent to other facilities.
"I'm not going to look my walrus in the eye and tell him he's got to
find somewhere else to work," Dohlin said.
At the aquarium Thursday, students from University Neighborhood High
School in Manhattan had just finished a tour for science class.
Officials from the Wildlife Conservation Society, which manages the
aquarium and the Bronx Zoo, say educational programs could be among the
first on the chopping block.
"Just to have these places as resources is important for anyone to come
and learn," said science teacher Jaclyn Hoahing. "Our kids live in the
city, and they don't get a chance to see wildlife around them."
In the foundering economy, officials in Muscogee County, Ga., should be
thrilled that they are about to receive more than 28,000 new residents
over the next two years -- the result of the Army moving a tank school
from Ft. Knox, Ky., to Muscogee's Ft. Benning.
Instead, Muscogee officials are worried that they can't handle the
flood of new public school students -- some 4,000 of them -- who are on
the way. The school district already cut $2.8 million out of its budget
this year in response to state funding reductions. The state reductions
may be more than $5 million next year, when the first wave of students
begins showing up.
School district officials are drafting a letter to the state asking for
an exemption. "We are being squeezed from both ends," said Myles
Caggins, the school district's chief of operations and facilities.
Budget trouble has even arrived in Alaska, where Republican Gov. Sarah
Palin had been anticipating a comfortable surplus -- fueled by the
summer's high oil prices -- of at least $5 billion.
No more.
With the double whammy of a declining economy and sharply lower oil
prices, Palin announced last week that spending in the current fiscal
year would have to be trimmed by $268.6 million to make up for a total
shortfall of $1.65 billion.
Much of the savings Palin expects to realize is in delayed oil tax
credits, not actual spending cuts. The remainder of the shortfall will
have to come from additional cuts, or the state's estimated $7 billion
in savings.
Palin is more ambitious than most governors these days. In her recent
State of the State address, she announced she was resurrecting a
long-dreamed-of plan to build a road across the wilderness from
Fairbanks to Nome. Total cost: $2 billion.
Palin has not said where the money would come from.
richard.fausset at latimes.com
Times staff writers Nicholas Riccardi, Erika Hayasaki, Kim Murphy,
David Zucchino and Bob Drogin contributed to this report.