-Caveat Lector- State, local spending up despite downturn 'Dire' situation fed by overambitious plans
By Dennis Cauchon USA TODAY 1/15/03 State and local governments are spending more money and hiring more people than last year, even as governors and mayors warn of draconian cuts in public services because of the economic slump. The National Governors Association says states face the ''most dire fiscal situation since World War II.'' But a USA TODAY analysis shows that most of the budget cuts being studied are not declines in spending from last year. Instead, they are reductions in spending increases that were approved when the U.S. economy was booming. For example, Minnesota legislators approved spending based on an expected 13.4% jump in tax revenue over the next two years. But tax collections are expected to rise 6.6%. The result: $4.6 billion must be cut. But those cuts would be from planned spending; actual spending is still expected to rise from present levels. In fact, spending by state and local governments rose at an annual rate of 4.2% in the first nine months of 2002, slightly lower than during stronger economic times, the federal government reports. After adjusting for inflation, spending increased 3.3%. The National Conference of State Legislatures says 31 states must close a $17.5 billion gap by June 30, when the budget year ends in most states. Forty-two state legislatures are convening this month, and budget problems top the agenda in most. Unlike the federal government, states must balance their budgets. Governors and other top elected officials say the financial problems could force layoffs of thousands of public workers and deep cuts in key programs such as education, health care and road construction. But their warnings mask the real situation. California has the biggest state budget problem. Last week, Gov. Gray Davis said the state must make up a $35 billion gap in the next 18 months. He proposed higher taxes on the wealthy and trims in aid for schools and health care for the poor and elderly. Spending by state and local governments has grown nationwide without interruption for decades, in good times and bad times alike. It has not fallen since 1944, and it has grown faster than the rate of inflation every year since 1982. The rate of spending growth is down slightly from the late 1990s, but governments remain one of the healthiest parts of the economy. They are growing at a time when corporate profits and cash flow are declining. State and local governments also have been doing more hiring than firing since the economy weakened. States employed about 31,000 more workers in December than a year earlier, an increase of 0.6%, the Bureau of Labor Statistics reports. Local governments employed 189,000 more workers, up 1.4%. Both are historic highs. By contrast, the private workforce shrank by 467,000, a decrease of 0.4%. Some social policy analysts fear that the move by many states to restrain spending will damage efforts to reduce school class sizes, help welfare recipients find jobs and expand health care for the poor. ''Government services are often a last resort and cannot be cut without real suffering,'' says Margy Waller, a welfare reform expert at the Brookings Institution, a liberal think tank in Washington, D.C. Not everyone agrees that spending cuts will have wide impact. ''This downturn is forcing us to look at things we probably should have done earlier,'' says Colorado Gov. Bill Owens, who is chairman of the Republican Governors Association. ''It's not easy. But I don't see this as the beginning of a fiscal crisis affecting the American people.'' <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://peach.ease.lsoft.com/archives/ctrl.html <A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of [EMAIL PROTECTED]</A> http:[EMAIL PROTECTED]/ <A HREF="http:[EMAIL PROTECTED]/";>ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
