Posted on 07/26/2002 9:45:29 PM PDT by Uncle Bill
States in Worst Fiscal Crisis in Decade
By Christine Hall
CNSNews.com Staff Writer
July 24, 2002
The states are facing their worst fiscal crisis in ten years, but efforts to use tax increases, tobacco settlement proceeds and other short-term fixes to shore up budget deficits ensure that "the seeds of fiscal crisis will remain," according to a new study by Manhattan Institute scholar William D. Eggers.
In fact, "Only by fundamentally restructuring government will state policymakers be able to contain spending growth and return accountability to state finance," according to Eggers.
In May 2002, the National Council of State Legislatures (NCSL) predicted a combined $27 billion shortfall in state budgets for the current fiscal year. Six states reported deficits of more than ten percent of the spending levels they had originally planned and another 17 states reported gaps of more than five percent. Sagging tax revenue is the main culprit, according to the NCSL report.
However, new spending also played a role. Between 1990 and 2000, states cumulatively increased spending by $176 billion and enacted tax hikes totaling $7.9 billion, according to the American Legislative Exchange Council (ALEC).
Lawmakers eager to close their budget gaps and finish legislative duties are easily tempted by "gimmicky accounting," or to raiding earmarked funds, raising taxes, using tobacco settlement funds and cutting aid to local governments, said Eggers.
Better solutions, he believes, include reducing state workforce costs; imposing broad-based spending cuts; reforming entitlement programs, especially Medicaid; selling and leasing government assets and enterprises; eliminating programs that aren't working and rewarding employees for saving money.
The best Medicaid reforms, he said, would allow consumers to choose among private sector health insurance providers, better target benefits to the truly needy and do a better job of tailoring benefits to the disparate people serviced by the program-seniors, the disabled and low-income families. Eggers also suggested replacing the current government-run system with vouchers.
Reining in Medicaid costs, which now comprise one-fifth of total state expenditures, is the biggest single problem facing lawmakers, Eggers noted. More than half of states are seeing Medicaid cost overruns and, by NCSL's count, 22 states are looking for ways to cut the program's costs.
Liberal interests don't seem any happier about the current state of affairs. Teaming up with the Campaign for Tobacco Free Kids, the American Lung Association (ALA) Monday complained about states raiding their tobacco settlement money to shore up budget deficits.
"It is bad enough that even before the current budget crisis, few states were keeping their promise to use tobacco settlement dollars to reduce death and disease caused by smoking," said John L. Kirkwood, CEO of the American Lung Association. But now, according to the two groups, states are cutting tobacco prevention programs by $102.3 million, or 13.3 percent in fiscal year 2003.
While 18 states have increased funding for tobacco prevention programs, by ALA's count, 15 states are cutting such programs.
Eggers pointed to former governors William Weld (R-Mass.) and Doug Wilder (D-Va.) as leaders who should be emulated by today's politicians. Both Weld and Wilder refused to raise taxes in response to budget crises in the 1990s and instead found ways to cut waste in their respective state budgets, said Eggers.
Surgeon General Warning: Smoking can cause elite socialist engineers fiscal nightmares because they know the country is bankrupt and a fast moving train wreck towards collapse and ruin. The pockets of big evil tobacco companies is just one of many that will have to be raided, along with the taxpayers wallets to continue the socialist utopia as smokers and non-smokers alike, will be forced into HillaryCare to provide for your care. So, smoke as the money is vitally needed as there is a money crisis for socialist facilitation, but denounce it as evil as the children must be protected at all costs, as the children belong to the state in the minds of a socialist. Besides, lawyers need to make a living too.
HOW BIG IS THE GOVERNMENT'S DEBT? - $33.1 TRILLION!
There Must Be Some Way Out Of Here
YOUR 401(K) IN 401 CHAOS - New York Post
$7 trillion worth of stock market value has been wiped out in the past 2-1/2 years
Ouch! Investors Lost $2.4 Trillion in '02
Rich lost $2.6 trillion in financial markets in '01
Networth of households dropped by a whopping $4 trillion
2001 Laws Approached $1 Trillion in Cost
US Set For $1 Trillion Of Internet Writeoffs
Bankruptcies rise to record level, indication that consumers kept spending in recession
Bankruptcies Soar - Breaking Records/Grim and Bear It
White House Says It Expects Deficit to Hit $165 Billion
The socialists are getting nervous
David Broder is getting nervous
Nelson Rockefeller is getting nervous
National Priorities Project is nervous
If there's a crisis, grab your wallet, and kiss more of your rights good-bye
The National Gambling Impact Study Commission Report
National Gambling Impact Study Commission - Final Report
Socialism: the Forbidden Ideology - by Robert L. Kocher
Slouching Toward Servitude - by Robert L. Kocher
Lost Or Unrecognized Multi-National Economic Principles And Slavery - by Robert L. Kocher
Are there no lotteries? No tobacco funds?
(Great links, Uncle Bill. Thanks.)
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