To get a sense of the struggle states have to balance their budgets and stimulate the economy, consider the holes in their budgets. States are expected to cut spending this year another $45 billion to $50 billion, roughly the amount of the president’s tax cut bill this year dedicated to economic stimulus, bringing their three-year budget cuts to $186 billion. Some of the need for these cuts can be attributed to money lost in the declining stock market, but much of it – and most, long term – comes from federal tax cuts that many states are expected to match.

The debate in Washington is whether this is a good thing: Do shrinking taxes eventually produce a bigger base from which to tax, lightening the load for all even as it supplies sufficient funds to carry out government or does it just leave permanent shortfalls? The Congressional Budget Office this year found very little to suggest the kinds of cuts passed by Congress would ever pay for themselves. That, however, is the Washington-level debate; it has theories to explain all sorts of fiscal policy. But the public doesn’t want a theory of health insurance or a theory of road building. It wants the insurance and the roads, and that’s where state and local governments come in. To understand that level, those helpful theorists should read a recent issue of National Journal examining the effects of declining state revenues.

Texas can’t afford to properly house prisoners. California suspended a multi-billion dollar road-repair program. Colorado is borrowing to keep its highway projects going. Oregon, famously, cut its school calendar. Kentucky, like many states, cut its social services to children. Michigan kept some of its cash-strapped environmental programs going by passing the costs to businesses in the form of fees. Maine is no different. It has tried just about all these devices to make its budget balance and it will have to do more of this next winter. National Journal points out that whether led by Republican or Democrat, states this year raised taxes by a total of $6.9 billion after raising them more than $9 billion in 2002 in the face of budget shortfalls that have exceeded $200 billion over the last three years.

Though Washington commonly accepts the idea that states brought on this problem themselves through profligate spending, the Center for Budget and Policy Priorities reports that states in the 1990s increased spending at a much slower pace than they had in the previous decade. Tax cuts were in vogue at the state level starting in about 1997, a fashion many states are reversing now to keep essential programs going.

Everyone wants firefighters to be paid and safe bridges and excellent schools and children protected. Congress and the administration can say these things even while passing more tax cuts, but state and local governments cannot. President Bush last week concluded that he had cut taxes enough to jolt the economy into moving again and that further cuts may not be necessary. Trickle-down theories aside, the relief from tax relief would have been welcome in state capitols.