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A STATE OF THE STATES ROUNDUP: For Most States Budget Shortfalls Loom Large, Education Spending in the Crosshairs

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"I realize the federal government can't go in and rescue everyone. It's not all their fault, but when we hear that the government is going to bail out the airlines, to heck with the airlines. We're providing the services that you're supposed to be providing. Help us out."

Notably absent from President Bush’s State of the Union address last week was the mention of any federal relief for states-which are currently struggling to close budget shortfalls totaling at least $67 billion. Like the federal government, state governments are feeling the effects of the downturn in the economy along with reduced tax collections and spending increases that were promised during the economic boom of the late 1990s.

However, increased spending and revenue loss are not the only factors that have placed state governments in their current economic pickle. Medicaid, a program first created as a partnership between the federal and state governments to cover health insurance for the poor, now must often cover the long-term care costs of care for the elderly, and, in some states, their prescription drug costs. Meanwhile, promised federal support for homeland security, election reforms, and programs contained in the No Child Left Behind Act is missing.

There is a growing frustration among governors. As Arkansas Gov. Mike Huckabee recently told The Washington Post, “I realize the federal government can’t go in and rescue everyone. It’s not all their fault, but when we hear that the government is going to bail out the airlines, to heck with the airlines. We’re providing the services that you’re supposed to be providing. Help us out.”

Over the last month, “State of the State” addresses issued by governors have reflected this belt-tightening fiscal environment. To their credit, most governors have promised not to cut education spending, choosing instead to raise cigarette, and state sales and property taxes. Here is a brief look at the current condition of education in selected states:

Arizona

Janet Napolitano, Arizona’s new governor, made improving public education her top priority in her State of the State address. Citing Arizona’s worst-in-the-nation high school dropout rate, she pledged to increase Arizona’s per-pupil expenditure. However, Arizona is currently facing a $300 million spending gap for 2003 and a projected $1 billion deficit in fiscal 2004. Given this environment, Napolitano faces a steep climb in the coming months. Her already tough road became more difficult after the Arizona GOP legislators released a plan to cut funding to universities, community colleges, and public schools in an effort to close the budget shortfall. According to The Arizona Republic, Republican lawmakers praised their plan as a way to end Arizona’s worst-ever fiscal crisis without raising taxes, overspending dwindling state revenues, or putting the state deeply into debt. Napolitano called it an unacceptable “wholesale attack on education.”

California

California’s $35 billion budget gap dwarfs the challenges that confront many other states. In his State of the State address, Gov. Gray Davis focused on what he called “one of the toughest budgets ever created” and stressed that his most immediate priority is “jobs, jobs, and even more jobs.” In a speech several days after his State of the State message, Davis promised to protect education as much as possible, but summarized deep cuts in education programs. In addition, he announced a plan that would roll 64 state education programs into a block grant that would allow districts to choose which programs they fund. Davis hopes that school districts would use money from what they see as less beneficial programs in favor of those that have better results.

Idaho

In his State of the State address, Idaho Gov. Dirk Kempthorne offered the state’s legislators a choice of raising taxes or making cuts in areas including public schools and higher education. Nevertheless, Kempthorne stressed that he would not “accept a budget that cuts education and guts the very services that Idahoans expect and deserve.” He is proposing a 1½ cent increase to the state sales tax over three years in order to generate $240 million.

Kentucky

In his State of the State address, Gov. Paul Patton promised to continue Kentucky’s nationally acclaimed school improvement programs, but asked state legislators to develop a compromise with him that would address the $500 million shortfall in the fiscal 2003 and 2004 state budgets. Calling the upcoming legislative session the most difficult he has faced, he warned that Kentucky cannot cut more money from the budget without affecting schools and other government services. He challenged the legislature and the citizens of Kentucky to decide between raising taxes or cutting expenses to existing commitments such as education, public safety, and public infrastructure.

New Jersey

Despite a $5 billion revenue shortfall in the state budget, New Jersey Gov. James McGreevey outlined several new initiatives for education in his State of the State address. Citing recent report findings that one in eight high school classes in New Jersey is taught by teachers without even a college minor in the subjects they teach, McGreevey said the state will insist that teachers be certified in their respective subject. After previously naming literacy the top education priority in the state, McGreevey also announced that 80 schools now have reading coaches.

New York

Gov. George E. Pataki pledged sweeping reforms for education in the state of New York. Specifically, he asked for more accountability from the state’s education bureaucracy. He offered few details on his plan and hinted that education may face cuts: “With the exception of public security, no segment of the budget will be exempt.” Several days later, Pataki released a budget plan that did, in fact, deeply cut state funding for schools, as well as health care. In New York City alone, the plan would cut education funding by $450 million, reducing by hundreds of millions of dollars the funds that Mayor Michael R. Bloomberg had counted on in his city budget proposal. Pataki placed the budget gap at $11.5 billion-$2.2 billion for this year, and $9.3 billion for next year.

North Dakota

One of the few states in reasonably good economic shape, North Dakota nevertheless is not without its problems. While the state’s fiscal situation is sound, it has struggled to attract industry and prevent the exodus of thousands of young people. In his State of the State address, Gov. John Hoeven proposed a $100 million program that would link education and economic development to a goal of revitalizing the state. The initiative, “Smart Growth,” would focus on improving education, increasing the number of high-skilled jobs, and would attempt to link schools and businesses. The plan also calls for an increase of $1,500 for teacher salaries in both 2003 and 2004, which would raise the state’s average teacher salary to $32,000. He also sought a 7 percent raise in per-pupil expenditure and an additional $1 million to close the funding gap between poor and affluent districts.

Mississippi

After $79 million in spending cuts, Mississippi still faces a $246 million deficit in the state’s 2003 fiscal budget. In his State of the State address, Gov. Ronnie Musgrove presented a plan to devote greater attention to teacher quality and increase K-12 education spending by $230 million. In order to pay for these increases, new taxes on casino gambling and cigarettes are currently being considered.

Oregon

While newly elected Oregon Gov. Ted Kulongoski has yet to give a State of the State address, he has certainly had plenty to talk about during his first month in office. On Jan. 28, Oregon voters rejected Measure 28, a three-year tax increase to help pay off the state’s $1.5 billion shortfall over the next two years. Passage would have prevented big cuts in education, public safety, and social services. Now officials must consider spending cuts to remedy a budget shortfall that remains even after $300 million in cuts for fiscal 2003. Cuts will likely include a 20 percent layoff of Oregon State Police employees and dropping 24 days-instead of 15-from the second semester of Portland Public Schools. In recent weeks, Portland students have taken to the streets to protest the shortened year (photo and article at: http://www.edweek.org/ew/vol-22/16thiswk.htm).

Kulongoski, who supported Measure 28, has said he would not seek new taxes if it failed. In a statement after the measure’s defeat, the governor said, “Measure 28 was a short-term fix to a long-term problem. We need to face up to the fact that Oregon is in a recession and our tax structure is such that when the economy takes a downturn, state services take a hit.”

Virginia

“We have made too much progress to retreat from our commitment to public schools. So let me be clear: If you send me a budget that cuts funding for education, I will not sign it.” So said Gov. Mark Warner in his State of the State address. In light of Warner’s strong stand on education funding, he and the Virginia General Assembly will likely have a very difficult time closing Virginia’s $2.1 billion shortfall. Warner has proposed a $65 million increase in the state’s K-12 education budget and urged state lawmakers to consider ending the state’s recently enacted plan to eliminate the property tax on automobiles. Warner also indicated that other tax increases may follow.

Washington

Despite a $2.4 billion budget deficit, Washington Gov. Gary Locke maintained in his State of the State address that education remains his highest priority: “We are committed to building a world-class education system. . . and [protecting] the core of public education even as we make deep and painful budget cuts in other areas.” The governor also stressed the importance of closing the gap between white and minority students and promised his support for a constitutional amendment that would allow school levies to be passed by a simple majority of voters.

West Virginia

West Virginia Gov. Bob Wise promised to protect K-12 education programs from the $200 million in spending cuts he is proposing for the 2004 budget. “Education is still the centerpiece of our economic-development plan and still the key to our future,” he said.

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