Typically, the worst budget years for states are the two years after a recession ends. Across the nation, budgets are already lean after several rounds on the chopping block. And unless lawmakers increase taxes or fees - unpopular moves in an election year - most will need to cut even more as they grapple with the steepest decline of tax receipts on record. Services ranging from higher education to programs for the elderly could be in jeopardy.
The crunch could also mean new tolls to fund road projects, more prisoners being released early to trim corrections budgets, and the end of welfare programs without federal matching dollars.
The Center on Budget and Policy Priorities offers a bleak forecast: State budget shortfalls are likely to reach a whopping $180 billion for the coming fiscal year, double the size of Texas’s annual budget.
“It’s going to be the toughest year yet,’’ said Raymond Scheppach, director of the National Governors Association, who predicts funding could evaporate for higher education, the arts, and economic development. “The states haven’t hit bottom.’’
Mary Ann Neureiter, who runs an adult day care center in suburban Atlanta, saw her state aid cut in half in 2009. The Cambridge House Enrichment Center once offered state-subsidized care to 10 low-income clients with disabilities such as Alzheimer’s. It’s now down to three, and Neureiter fears the funding could dry up altogether this year.
“It’s heartbreaking because I foresee, in the coming year, it’s going to get even worse for services for the elderly,’’ she said.
States had already closed a $146 billion gap when they put together their budgets for the current fiscal year. They were short by about 20 percent, with 36 states now reporting an additional shortfall of $28.2 billion for the fiscal year that ends in June, according to data compiled by the National Conference of State Legislatures.
That’s because state tax collections lagged behind even pessimistic projections.
