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Can States Avoid the Next Recession (or Did it Start Yesterday)?

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Here in San Antonio (where I am attending the National Conference of State Legislatures) it is 103 outside. Inside, where legislators are discussing state budgets, the feeling is pretty chilly. You hear a fair bit of gallows humor: “Our budget for (fill in your favorite state service) is fully funded – or at least it was until yesterday.”

But to get to budget stability, states have made significant cuts in services. Not surprisingly, since K-12 education accounts for 1/3 to 1/2 of all state spending, many of the cuts came out of the schools.

In Florida, the state cut $540 per pupil from its state funding — a total of $1.35 billion. Washington cut nearly $1 billion, but did it largely by waiving a state cap on class size.

If anything, health care and Medicaid took far worse hits. And there were cuts in other state programs. (My favorite may be in Wisconsin, where a move by the state prison system to create “Taco Tuesday” for inmates apparently saves 10 cents per meal.)

Benefit cuts for state workers abound. NCSL says that 39 states have already passed major pension legislation, and another 3 are considering pension changes.

Still, legislators were at least cautiously optimistic that the worst might be over. At least, they were until yesterday.


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