Aug. 23, 2001 Many State Treasuries Are Running Dry By DAVID A. LIEB .c The Associated Press JEFFERSON CITY, Mo. (Aug. 23) - Some foster children here may no longer get state aid. A new prison stands completed but empty. And the fountains outside the state Capitol temporarily ran dry. All of this because of budget cuts by a Missouri government that just a couple of years ago was so flush with money that it was giving cash to its residents. Now the combination of tax cuts and a lagging economy has suddenly sapped Missouri's revenues. And a growing Medicaid and prescription drug program are forcing up expenses. Put simply, the state doesn't have enough money to go around. It's a scenario playing out across the country. At least 17 states have struggled with budget shortfalls, according to National Conference of State Legislatures. And nearly 30 states are cutting previously made appropriations, says the National Association of State Budget Officers. Although not of the same magnitude as Missouri, the state cuts are the most severe since the recession of the early 1990s. ''Many, if not most states, are having tight fiscal times,'' said Scott Pattison, executive director of budget officers group. ''A lot of finance officials in states are very concerned. Is this the worst it gets, or is this the beginning of it getting worse?'' In Missouri, at least, the budget cuts are far from over. Since taking office in January, Gov. Bob Holden has trimmed at least $325 million. The latest round of cuts, announced Wednesday, targets administrative costs such as travel, training and equipment in the state's education and social services departments. Although Missouri is less than two months into its fiscal year, Holden plans to announce even more cuts in coming weeks, slicing about $75 million more from state agencies. ''My intention is to streamline government as aggressively as I can,'' said Holden, who was criticized earlier this year for throwing a $1 million inaugural party. Most of that money, however, came from private donors. Technically, Holden's cuts are ''withholdings'' that still could be spent if the state's finances improve. But agencies aren't expecting any of the money. Meanwhile, state agencies have thousands of vacant positions. And most state employees received no pay raise this year, prompting increased unionization drives. Some state employees rallied Wednesday in St. Louis against Holden's hiring freezes and working conditions they consider less than desirable. Some Republicans, meanwhile, say the Democratic governor is exaggerating the problem. They note that state revenues still grew 4.2 percent last fiscal year, although that was shy of the 5.8 percent projection. Any warning of declining state revenues ''is a complete lie,'' said Republican state Sen. Chuck Gross. ''The state of Missouri is not broke.'' Lawmakers thought they had saved money. They left empty a new $168 million maximum security prison because the state could not afford the $45 million needed to run it. They also trimmed the rolls of Missouri's popular Grandparents as Foster Parents program by tightening the eligibility requirements to receive subsidies for grandchild care. Now Holden is looking for more savings. He wants to repeal a prescription drug income tax credit for senior citizens that cost $85 million last fiscal year with a new, cheaper program benefiting only the seniors in the greatest financial need. The governor's office, for more than a year now, also has held up $140 million earmarked for state construction projects - most at universities or river ports. In the meantime, residents in cities such as Ste. Genevieve are watching barges float down the Mississippi River without stopping because the state doesn't have the money to fund ports. At least one business has dropped its plan to locate there, citing the lack of a port. ''It's had a behind-the-scenes economic impact,'' said Marv Harman, the economic development director for Ste. Genevieve County. ''But everybody's selfish, and we want our money.'' AP-NY-08-23-01 0149EDT Copyright 2001 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL. Stephen Philion Lecturer/PhD Candidate Department of Sociology 2424 Maile Way Social Sciences Bldg. # 247 Honolulu, HI 96822
