How largest states are addressing their deficits

AP News
Posted: Apr 13, 2011 12:27 PM
How largest states are addressing their deficits

How the five most populous states are dealing with their budget shortfalls:


_ Democratic Gov. Jerry Brown is calling for a mix of spending cuts and tax increases to close a deficit that was as high as $26.6 billion. He also wants to shift some state responsibilities, such as incarceration or parole supervision of lower-level offenders to local governments. He wants the Legislature to call a special election so voters can decide whether to renew temporary tax increases approved two years ago by the Legislature. The increases to the sales, personal income and vehicle taxes will expire by June 30, but Brown wants them extended for five years. They are projected to raise more than $9 billion a year.


_ Texas is projected to collect $15 billion less revenue over the next two years than it did over the last two years. In order to maintain the current level of services over the next two years, accounting for growth and inflation, the state would need to find $27 billion. Lawmakers have promised not to raise taxes, which leaves two options: slashing state services by 28 percent, or offsetting those cuts with money from the $9.4 billion rainy day fund. GOP lawmakers and Republican Gov. Rick Perry previously rejected any talk of tapping the fund, but now lawmakers are considering a bill to use some of the reserves. Texas is also considering allowing slot machines in some areas, which could bring in $1 billion in revenue.

New York:

_ The Legislature passed a budget that largely adheres to the plan by Democratic Gov. Andrew Cuomo, which proposed cutting overall spending by 2.9 percent. At the same time, Cuomo refused to support an extension of a temporary surcharge on the income tax paid by New Yorkers making more than $200,000 a year, which is due to expire this year. The Assembly's Democratic majority argued that would be worth up to $5 billion and would go a long way to addressing a $10 billion deficit without making deep cuts to schools, universities and social programs. Cuomo also sought concessions from public employee unions to avoid some or all of what he projects to be 9,800 layoffs in the work force of about 170,000 workers.


_ Republican Gov. Rick Scott is proposing a budget that would cut $3.6 billion to close a deficit, and then cut more so he can reduce taxes and fees by $1.7 billion. Scott wants to begin phasing out the state's corporate income tax with the belief that more businesses will relocate to Florida, creating jobs. The Republican-led Legislature isn't making any promises to go along with the plan, with lawmakers saying they will make the necessary budget cuts first, and then see if tax cuts make sense.


_ Despite a $15 billion budget deficit, Illinois is the only one of the five most populous states in which the governor is looking to increase spending. The state has raised income taxes by two-thirds, and Democrats want to borrow about $8.7 billion to pay off old bills that have piled up. Democratic Gov. Pat Quinn's proposed budget calls for some cuts, but increases spending elsewhere. The net result: Spending would rise $1.7 billion.