States Are Hit Hard by Economic Downturn
Many Cutbacks Felt by Most Needy

By Keith B. Richburg and Ashley Surdin
Staff Writers
Washington Post
March 31, 2008

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/30/AR2008033002138.html?nav=rss_nation

NEW YORK

In Illinois' Cook County, women in poor neighborhoods
no longer have access to free mammograms from two
mobile vans testing for breast cancer.

In Michigan, hikers will find about 20 campgrounds
closed, and scientists are ending their studies of fish
populations in the Great Lakes.

In New Jersey, state workers are being laid off, and at
least one town is canceling its traditional Fourth of
July fireworks.

And in California's San Fernando Valley, Everardo
Orozco, 53, who has AIDS, exhausted his medical
benefits and can no longer afford the drugs that are
keeping him alive.

"I don't know which ones I can afford every month,"
Orozco said, explaining how his supply is dwindling and
his share of the payments has skyrocketed from $400 to
$3,200 per month. He now injects himself with some
medications once a day instead of twice -- not enough
to keep his T-cell count from dropping or to prevent
his body from becoming resistant to treatment. And he
fears that there will be more cuts.

State budgets have been hit hard by a worsening
national economy, including rising costs for energy and
health care. In addition, fallout from the subprime
mortgage crisis -- declining home sales, deflated
property values and mounting foreclosures -- has caused
a slide in states' anticipated tax receipts. Revenue
from property taxes, sales taxes and real estate
transfer taxes is affected.

At least half of the nation's states are facing budget
shortfalls, some of them severe, and policymakers in
most of the states affected are proposing and passing
often-painful measures to trim costs and close the
gaps. Spending on schools is being slashed, after-
school programs are being curtailed and teachers are
being notified of potential layoffs. Health-care
assistance is being cut for the elderly, the disabled
and the poor. Some government offices, such as motor
vehicle department locations, will start closing on
weekends, and some state workers are receiving pink
slips.

Some analysts worry that the impact is being felt
disproportionately by the most needy.

"It's disappointing, the extent they tend to focus
their cuts on the most vulnerable," said Iris J. Lav,
deputy director of the Washington-based Center on
Budget and Policy Priorities, a liberal think tank that
monitors state budget issues. "It does appear to
disproportionately affect low-income people."

Unlike the federal government, which can run deficits,
almost all states are required by their own laws and
constitutions to balance their budgets. Many states are
just now hammering out their budgets, so some targeted
programs could still be saved in last-minute
negotiations.

In most states, talk of raising taxes has become
politically perilous, particularly with residents
already hurting from falling housing values and a
worsening economy.

Only half a dozen states have approved, or are
considering, tax increases, including Maryland and
Michigan, both of which raised taxes in 2007. In New
Jersey, which has a $3 billion deficit, Gov. Jon S.
Corzine (D) has proposed eliminating or reducing most
property tax rebates. In New York, facing a $5 billion
shortfall, an idea in the General Assembly for a new
income tax for people making more than $1 million per
year died last week after the Republican-controlled
Senate, and Gov. David A. Paterson (D), strongly
opposed it.

Instead of raising taxes, most states with shortfalls
are curtailing services, and the effects are already
being felt nationwide. Some of the most dramatic cuts
are being made in California, Maine and Rhode Island,
according to budget experts, with New Jersey not far
behind.

California is facing the worst budget crisis, with a
$16 billion shortfall, and Gov. Arnold Schwarzenegger
(R) has proposed a $4.8 billion cut in education
services. About 20,000 teachers, counselors,
librarians, nurses and other support staff members have
received notice of potential layoffs, according to the
state's Education Department.

Los Angeles, which has the state's largest school
district and a $6 billion budget, faces a $460 million
cut for the next school year -- the dollar equivalent
of shutting down the entire district for two weeks.

In Thousand Oaks, Calif., the Conejo Valley Unified
School District, home to 30 schools and 22,000
students, has already closed two elementary schools for
next year. Superintendent Mario Contini said layoffs
could be next. "School districts have been making cuts
every year, and there isn't much left to cut," he said.
"We've already cut the flesh to the bone, and now we're
removing the skeletal parts. It's that severe."

Schwarzenegger has also proposed $650 million in cuts
to the Healthy Families Program and Medi-Cal, which
together provide health-care services to more than 7
million senior citizens, disabled people and children
in the state. Adults under the Medi-Cal program would
lose their dental benefits, as well as optometry and
psychology services.

The California Department of Public Health is also
facing an $11 million cut to AIDS services, with the
bulk of that -- $7 million -- coming from a program
that helps low-income Californians, such as Orozco,
obtain lifesaving antiretroviral medicine.

Orozco had been paying $400 per month for the 15 daily
medications he needs. But when his allotment under the
program ran out, his share jumped to $3,200, and he
could no longer afford five of the drugs.

"We want to continue to live, you know," he said. "We
need to continue fighting what this is. I've been
dealing with this since 1983. Every day, it's a fight.
It's not easy. Either they help us do something to
fight this, or we're going to die."

A recent 50-state survey by the Associated Press showed
that hundreds of thousands of poor children, the
disabled and the elderly stand to have their health
coverage eliminated as a result of budget cuts, and
more than 10 million people would lose access to dental
care, specialists and name-brand prescription drugs.

Budget experts said they see a repeat of the pattern
that happened during the recession of 2001: States
generally cut health services and medical benefits
first, because these costs are often rising more
rapidly than others, and the savings tend to be
immediate.

Subsidies to higher education are also a favored target
for budget cuts -- mainly because policymakers often
believe that universities can find money from other
sources, such as private donations or higher tuition.

Budgets for parks and recreation, and for natural
resources and science, also stand to take a hit.

In cash-strapped Michigan, dealing with the struggles
of the automobile industry, the Department of Natural
Resources is closing 20 campgrounds, including the
highly popular and rustic Pinney Bridge State Forest
Campground, considered one of the most beautiful in the
Lower Peninsula. The department also plans to end its
studies of fish populations in the Great Lakes, and 14
conservation officials are being laid off.

Hunters in Michigan will also find their license fees
increased.

In Illinois, Gov. Rod Blagojevich (D) has proposed
ending a popular controlled pheasant-hunting program at
state sites. Outraged hunters have said that among
those affected will be the young and the handicapped,
who have access to special hunts under the state
program.
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Surdin reported from Los Angeles. Staff writer Kari
Lydersen in Chicago contributed to this report.

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