THE STATES STRUGGLE

Where does the finessing of a state budget stop? New revenues on sin – alcohol, gambling, tobacco – spending cuts systemwide (but not on K-12 education), transfers from rainy day accounts and trust funds, cuts to municipalities and higher education and further shortfalls brought about by Medicaid costs.

Maine, right? No, 10 other states, each mostly facing problems similar to Maine’s and most looking for solutions that do not involve raising sales or incomes taxes.

The Urban Institute has been keeping track of these states (Alabama, California, Colorado, Florida, Massachusetts, Michigan, New Jersey, New York and Washington) during the latest three years of fiscal crisis and the state responses would make Mainers feel both at home and a little better about themselves. Often the responses elsewhere were more pathetic than here, though this state’s budget crisis is arguably worse.

For instance, after all the reassuring talk about the value of education, most states studied cut higher education significantly. Colorado cuts its higher-ed budget by 30 percent; California colleges and universities saw a 9 percent cut. Washington took $131 million from its higher-ed budget and allowed for 7 percent tuition increases in each of the next two years. Maine, contemplating flat funding in higher education, is slightly better in this.

Colorado sold $160 million worth of state buildings then leased them back; Washington knocked 25,000 people out of its health program; Texas reduced health care eligibility for poor, pregnant women; New Jersey cut back its property-tax relief program. One positive note: States slowed the rates they were draining their rainy day funds to pay for ongoing expenses. Unfortunately, they did this because many of the funds were out of money.

So what was worth emulating in the study? Only the hardest lessons. Several states seemed to have recognized that the budget shortfalls were part of a larger shift that began at the federal level, and that they needed to address it by making permanent changes such as reducing the number of state workers, canceling pay increases, requiring larger contributions for health care.

None of these is especially creative, but they do avoid the panic that has marked the beginning of each season’s budget deliberations for the last three years. (The institute did note that almost all the states benefited from the $20 billion in aid in the last federal tax cut package – Sen. Susan Collins, who introduced the idea, must have gotten lots of thank-you cards, and likely requests for more funding.)

One area where the 10 states split: The northeastern states and Michigan raised taxes last year to help fund their budgets, the rest remained strongly opposed to tax increases.

If it is any consolation to Maine, its budget misery has lots of company.