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STATE BUDGET DEFICITS GROW: Majority of States Forced to Cut Education

According to a new report, deteriorating fiscal conditions are forcing states to make very difficult spending decisions. The new report, 2002 State Budget and Tax Actions, released by the National Conference of State Legislatures, showed that 43 states reported a budget gap and were forced to raise taxes, cut programs, and drain reserve balances.

In April, 43 states reported budget gaps totaling $27.3 billion collectively. By June 30, the end of the fiscal year for almost all states, the gap had risen to $35.9 billion, an increase of $8.6 billion. Estimates for fiscal 2003 expect the aggregate budget gap to grow to $57.9 billion. Of this total, California’s budget gap of $23.7 billion represents almost 40 percent.

States tried different strategies to close the budget gap, but education was a common target. Of the 29 states that implemented targeted or across-the-board budget cuts, 19 states cut funding for higher education, expecting that higher tuition would offset the reduction. Meanwhile, twelve states reported spending reductions for K-12.

These state budget problems come during a time when the federal government is imposing higher standards and increased accountability through the No Child Left Behind Act, but providing scant resources. For instance, the President’s education budget proposes only a $1.4 billion increase for all education programs-the smallest increase in seven years-and actually cuts $90 million from elementary and secondary school programs covered by the historic education reform bill.

Read more of the report’s results.


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