Conn. Not Alone in Budget Gaps
By Paul Ziobro
WASHINGTON – Connecticut’s not alone in facing a projected budget gap for this fiscal year and next. Nearly three-quarters of the states reported budget gaps midway through fiscal year 2003, with Connecticut spending expected to fall $650 million short of revenue estimates, according to a report Tuesday by the National Conference of State Legislatures.
The Constitution State also expects its budget gap to increase to $1.7 billion in fiscal 2004, according to the report. Oklahoma state Sen. Angela Monson, the NCSL’s president, said the federal government needs to provide billions of dollars in assistance to fulfill its commitments to programs such as the No Child Left Behind Act, election reform and special education programs.
“We don’t think the budget proposed by the president goes far enough,” she said. “Flexibility alone will not meet those needs.”
The report said a faltering national economy, a plummeting stock market, soaring health care costs and contractions in manufacturing have destabilized state budgets, putting them “under siege.”
Nearly three-fifths of states have imposed across-the-board budget cuts, including Connecticut, which sliced $27.9 million for fiscal 2003 from its general expenditure fund, the report said.
Connecticut is also one of eight states that have eliminated state jobs. Gov. John Rowland, a Republican, already has laid off 2,800 employees for 2003 and is likely to eliminate 1,000 more this fiscal year, according to the report.
John Stiver, associate professor of economics at the University of Connecticut at Stamford, said either raising taxes or cutting state services are the two options to consider to remedy the budget shortfalls, although he has not seen the specifics of the budgets.
But if the problem stems from the slowdown in the economy, he said, Connecticut residents need not worry.
“People shouldn’t worry if a good portion of the shortfall is because of the economic slowdown, to the extent that the slowdown’s not going to be permanent,” Stiver said.
Stiver said that if the economy picks up later this year, which he said is likely, states may see a spike in revenue, which would cut into the budget gap. Nevertheless, Connecticut, like most states, is required by its constitution to produce a balanced budget each year.
Connecticut also joins more than half the states in having no tax increase proposals on the table to alleviate their budget woes, the report stated.
The report did not take into account President Bush’s proposed budget for fiscal 2004 and did not consider how a war in Iraq would affect state budgets.
NSCL, a bipartisan organization that serves state legislatures, issued the report based on information collected through surveys from state fiscal directors in the past month.
Published in The Hour, in Connecticut.
