Basic Needs Threatened by Busted State Budgets

California, Michigan, Pennsylvania, Ohio and other states have been forced to cut funding to state functions and programs in order to keep their budgets balanced.

The cuts have created political turmoil, as different groups try to keep their favorite programs funded and lawmakers fight over how to deal with the shortages.

Tax money moves everything

	When U.S. citizens pay taxes every year, that money helps to pay for goods and services run by the local, state and federal governments.

The budget crises around the country are tied directly to the fact that the weak economy is producing fewer goods and services and employing fewer people, so there is less money to be taxed.  This means that tax money, or revenue, that a state was counting on to pay for teachers, prison guards and health care for senior citizens is not there.

In Washington state, the government expects tax revenue to decrease by $238 million for the next two years because of the economic slump. That decrease means the state will be about $430 million in the hole for the current budget year, the Associated Press reported.

"Although we believe the recession has bottomed out, it will take some time for revenues to recover," Washington Gov. Chris Gregoire said.

Cities are affected, too.  In Philadelphia, city leaders need the state of Pennsylvania to raise the city sales tax, or it will be forced to close health centers and parks and would be unable to pay for the court system.

Essential services at risk

	Children's medical programs are among the services at risk when tax revenue is too low.

When tax revenue is too low, elected state leaders have to decide how to balance the budget, which means they have to figure out how to make their expenses fit their income, just like families do.

In state government, representatives and senators form the legislature, and the governor leads the executive branch. The legislature votes on a budget and the governor has to approve it.

In states with troubled budgets, the legislature and the governor must figure out if they are going to raise tax rates, cut services, or some combination of those to balance the budget. If politicians don’t want to anger voters by raising their taxes during bad economic times, services that many people consider essential are cut.

In Ohio, libraries across the state face the possibility of closing branches or firing employees because a recent budget compromise by state leaders cut 30 percent of library funding.

In Michigan, which has been hard hit from problems in the automobile industry, state leaders are considering cutting $1.2 billion from the state budget.  If they do not work out a deal by Oct. 1, the state government could shut down.

A Detroit Free Press editorial spelled out the consequences if politicians don’t figure out what to do with the budget. 
 
“From preschool to medical services, it's more likely that each passing day without appropriate funding after Oct. 1 would spell the end -- an inability to make payroll in places as far flung as nursing homes and early learning programs for 4-year-olds.”

Stimulus money helps states at expense of federal deficit

	President Obama signed the $787 billion stimulus package into law, one of the largest federal spending programs in U.S. history.

The federal government has tried to help states deal with these problems by giving them extra money to fill holes. President Barack Obama’s stimulus bill, which became law February, included $8.8 billion specifically for state budget holes.

Many Republicans did not support the Democratic president's plan. 
 
"It contradicts what 'stimulus' was supposed to be -- it was supposed to be used to create jobs, spur economic growth and invest in our infrastructure," said Kurt Bardella, a spokesman for Republican California Congressman Darrell Issa, who has been one of the most vocal critics of the plan.

Supporters of the stimulus plan say that federal money, which will add to the amount of money the federal government owes to lenders, will help keep the economy intact and keep state governments functioning. But critics argue that the stimulus money shouldn’t be used to fix state budget problems.