Posted on 12/23/2002 8:37:46 PM PST by FreeSpeechZone
States Facing Deeper Budget Deficits
WASHINGTON -- States will face budget deficits of at least $60 billion next year thanks to a weak economy, forcing deep spending cuts or tax hikes, an independent analysis finds.
Already, governors in 11 states are proposing cuts in health programs that would eliminate health insurance for 1 million people, according to a report released Monday by the Center on Budget and Policy Priorities.
"State budgets are in deep trouble right at the moment," said Leighton Ku, an analyst at the center, which leans liberal but has a reputation for evenhanded analysis.
In its analysis of the outlook for state budgets, the center found that based on data available, 42 states face deficits totaling $60 billion to $85 billion for fiscal year 2004. That amounts to 13 to 18 percent of state's total budgets.
This comes on top of $50 billion in cuts already made going into the current fiscal year, and on top of $17.5 billion in additional deficits that will have to closed before the fiscal year ends in June.
Unlike the federal government, which can and often does run a deficit, nearly all states are required to balance their budgets each year. That means increasing taxes or cutting spending.
The pressures are significantly greater that past budget crunches, the center said. In the early 1990s, state deficits peaked at about 6.5 percent of total revenues, said analyst Iris Lav. She added that states have already made easy cuts, such as freezing travel or using revenue from their tobacco settlements, and they will be soon forced to look at fundamental services.
On the chopping block is health insurance, one of the biggest budget items.
So far, 11 governors have proposed cuts in Medicaid and the Children's Health Insurance Program, the center said. If these cuts are adopted - most of them still must be approved by legislatures - about 1 million people would lose health insurance.
Most of the people who would lose eligibility for these programs are parents, and sometimes children, in working poor households - the same people that states worked to add to these programs in healthier economic times.
For instance, in California, Gov. Gray Davis proposes cutting 300,000 low-income parents with incomes between 61 and 100 percent of the poverty line (the poverty line is about $15,000 for a family of three), and another 200,000 parents with lower incomes.
In Tennessee, changes already being implemented will cut health coverage for 160,000 to 250,000 adults and children in working families. And in Oklahoma, cuts scheduled to take effect in the coming months would virtually eliminate the CHIP program and, when fully implemented, affect some 80,000 people.
Cuts to health coverage have also been proposed in Connecticut, Massachusetts, Missouri, Montana, Nebraska, Nevada, New Jersey and Washington state.
Analysts at the center suggest that in order to help states avoid deep cuts in health, education and other key services, the federal government help them by picking up a larger portion of Medicaid spending or otherwise easing the crunch.
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On the Net: Center on Budget: http://www.cbpp.org
What the states won't do but should is take a look at income and figure out what the state is really suppose to do.
Like Militia, schools and roads.
Anything else is beyond a state's mandate.
CUT CUT CUT funding services aid help assistance.
CUT NOW and gain back balance. Let the nanny state continue to swell and continue in deficit.
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RAISE TAXES AND YOU LOSE REVENUES AND PEOPLE WILL LEAVE YOUR STATE (AND YOU WILL LOSE REVENUES).
Good luck with your decision.
Patrick McMahon USA TODAY SKYKOMISH, Wash. -- Businessman Eric Phillips learned to hate property taxes as he watched assessments rise on his weekend cabin in the foothills of the Cascade Mountains.
About 50 miles northeast of Seattle, his 1,100-square-foot cedar-frame house, barn and woodshed sit on 1.5 acres next to a railroad line. Phillips paid $770 in property taxes five years ago, when the property's assessed value was $73,000.
By last year, his annual tax bill had jumped to $1,227, largely because King County assessors had raised the value of his property to $106,000. Phillips' tax bill for 2003 hasn't arrived yet, but he's staring at what probably will be another jump because the county now values his cabin at $144,000.
Phillips and other property owners across the USA have seen their tax bills rise because of increasing property values. But now they are confronting the prospect of another tax whammy: Local governments, increasingly desperate to maintain revenue in the face of state and federal cuts, are raising property tax rates. King County officials, who last month passed an annual budget that sliced spending on parks, jails and human services programs, have asked state lawmakers for relief -- possibly by allowing the county to raise its property tax rates.
For Phillips, the idea that taxes could lurch higher is daunting. ''Something's got to be done about property taxes. If this keeps up, people will be driven out of their houses. They already are,'' says Phillips, 58, of Everett. ''This is out of control.''
Property taxes generally are calculated by applying a tax rate to the assessed value of a piece of property. For example, the owner of property with an assessed value of $200,000 that is taxed at an annual rate of $6 per $1,000 of value would pay $1,200. If the value of the house goes up, or if the tax rate goes up, the property owner pays more.
Although such taxes are paid by property owners, renters often are pinched by rising property taxes as well because owners typically pass on such costs to their tenants.
During the 1990s, governments across the USA did not need to raise tax rates to increase revenue because property values were soaring. Rising assessments have led some property owners to complain that governments are overestimating the value of property to collect more revenue. (Phillips, for example, says he does not think he could sell his cabin for more than $85,000, even though the county says it's worth much more.)
Such complaints have led property owners to routinely question their assessments with local tax review boards. Now property owners are beginning to protest tax-rate increases and to push for constitutional limits on a variety of property taxes.
Local governments' reliance on property taxes peaked in the mid-1970s. That was before taxpayer revolts led to measures such as California's Proposition 13, a 1978 ballot referendum in which state voters limited tax increases. It triggered a nationwide rebellion that led several states to restrict property taxes.
Pete Sepp, spokesman for the National Taxpayers Union, says that because of soaring assessments and proposals to increase property tax rates, ''we're entering a new cycle of Proposition 13-style property tax limitation efforts.'' Sepp foresees such efforts in Washington state, Michigan, Ohio and Oregon.
In King County outside Seattle, property values continue to rise because people ''want space, and they are willing to pay almost anything to get that space and move away from the city,'' says Stan Roe, executive assistant to county tax assessor Scott Noble. ''Property values are going up.''
David Brunori, editor of State Tax Notes, a weekly publication, says, ''What's happening this year is, the real estate boom of the mid- and late 1990s is now catching up with the nation's tax assessors.''
But increasingly higher tax rates also are a factor in rising tax bills, he says.
Local officials, meanwhile, are squirming at the dilemma they face: take the unpopular step of cutting government services, or take the unpopular step of raising taxes.
When taxpayers complain, those officials point to the state and federal governments.
''Budgets in cities and towns have been pinched from many directions. We have been shouldering the financial burden for homeland security for 15 months. Revenue sharing with our states is down,'' says New Haven, Conn., Mayor John DeStefano, president of the National League of Cities. ''Because federal and state governments have failed to enact responsible tax policy, cities and towns are left holding the bag.'' The league lobbies on behalf of municipalities.
Frustration with property taxes was evident in this year's political campaigns, Brunori says. ''Virtually everyone who ran for governor in every state in the last election vowed to reduce property taxes, and that's fueling the reform movement,'' he says. ''You'll see reform in many states in the coming year. But what will temper that is the severe budget crisis facing state and local governments. It's hard to come up with money for tax reform when you're broke.''
Property taxes remain the primary tax source for local governments and are responsible for 72% of all local tax revenue, according to a report issued in May by the National Conference of State Legislatures. State governments, by contrast, typically rely more on sales or income taxes. Only four states -- Montana, Vermont, Washington and Wyoming -- rely on property taxes for at least 10% of their revenue.
The large corps were cooking their books under Bush Senior and Junior too, they just finally collapsed under their own weight.
Dot coms? Please, everyone was investing in them. Klintoon didn't hold anyone's hand, while people were throwing in tons of cash on a "sure" deal.
As for the budget, it worked just as well for both parties. Everyone wanted to believe the Klintoon lie. Democrats spent more while Republicans cut taxes, everyone was happy with the unreality. The whole political spectrum is to blame, they were all getting their jollies and so were the people.
And as far as cleaning up, Bush isn't doing it. Eron officials were only arrested after massive public pressure. Spending control? Please, huge deficits. The Iraq war alone is projected to cost $100-1,200 Billion dollars...so where is the money coming from?
Klintoon is blamed for everything because certain individuals don't want to take responsability for their own actions in going along with his fairie tale.
NAW it will never happen that a pol will give up his perks and salary for the CHILDREN.
Apparently
Davis announced late last week that the figure was $34B and folks here are suspicious that Davis was lying to cover his arse.
Many in the press, usually sympathetic, speculate the figure is closer to $50B over the next 18 months.
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