Monday, July 3, 2017
States Without A Plan: 11 U.S. States Haven't Passed Budgets
States Without A Plan:
11 U.S. States Haven't Passed Budgets
Cub Scouts being kicked out of a campground in New Jersey may be the most visible sign of budget problems in American states, but New Jersey is far from alone in struggling to work out a spending plan.
As the budget year started most places Saturday, 11 states did not have budgets in place, according to the National Association of State Budget Officers.
Not all the budget fights are as dramatic as Republican Gov. Chris Christie's shutdown in New Jersey, or the granddaddy of spending disputes - the now more than two years Illinois has operated without a spending plan.
Many of the disputes are driven by ideological divides made worse by poor budget forecasting. Half of states received less in taxes than expected last fiscal year, the worst job of estimating since the tail end of the Great Recession, according to the budget officers association.
In some states like Wisconsin, the disagreement is whether to borrow money or raise taxes.
The states without a budget on July 1 are Connecticut, Delaware, Illinois, Maine, Massachusetts, New Jersey, Oregon, Rhode Island, and Wisconsin, while in Pennsylvania and Michigan the budget has passed the Legislature and is on the governor's desk.
A look at the problems blocking spending plans in several states and the potential consequences:
Republican Gov. Christie ordered the shutdown of nonessential state services like state parks and the motor vehicles commission late Friday as he puts pressure on Democratic lawmakers to overhaul New Jersey's biggest health insurer.
There were the obvious signs of a modern budget impasse like the roughly 25 Cub Scouts from Pack 124 in Tinton Falls being forced to leave Cheesequake State Park. Christie's administration placed the photo of Democratic Assembly Speaker Vincent Prieto, on who it's blaming the shutdown, on signs announcing the parks are closed.
New Jersey Democrats worry if they don't give in to Christie's demands in the nearly $35 billion budget, he will use his line-item on education spending.
Saturday marked the start of a third year without a budget for Illinois. And that lack of a spending plan has it in the most dire straits of any state in the United States.
The problems started when Republican Gov. Bruce Rauner took over in 2015, the same year a temporary four-year tax increase ended. In his first budget year, Democrats ignored Rauner's demands, and the state kept the same spending plan as it had when it was collecting the extra $7 billion a year in taxes.
Illinois is now running on an estimated $6 billion deficit. Comptroller Susana Mendoza is warning that without some kind of spending plan, state workers may stop getting paychecks, pension payments may be halted, money-generating lottery ticket sales could stop and the state's credit rating could fall to "junk" by the summer.
In Maine, lawmakers worked over the weekend, but it appeared residents will start dealing Monday with the state's first government shutdown since 1991.
Democrats and Republicans in the Legislature worked together on the two-year, $7.1 billion budget, but Republican Gov. Paul LePage said he couldn't accept because it did not include his income tax cuts.
Unlike other states facing budget disputes, both lawmakers and the governor appear to be trying to end the game of chicken. LePage made his own suggestions and staffers appeared to praise the work being done over the weekend with hopes that a final vote on a deal could be held Monday.
The budget deal in Wisconsin fell apart over an issue dogging many states these days - how to pay to fix and improve crumbling roads.
Dwindling collections from the state's gas tax and vehicle registration fees have left a $1 billion hole in the two-year, $76 billion spending plan Wisconsin was supposed to have in place Friday.
Republican Gov. Scott Walker wants to borrow $500 million and delay some projects to save money. Some Republicans want to borrow even more and the GOP discussed a new heavy truck fee to raise $250 million, but that appears to be dead along with any discussion of raising the gas tax with Walker considering running for a third term next year.
The only western state without a budget appears to be well on its way to passing a spending plan.
In Oregon, the drama started when Gov. Kate Brown and fellow Democrats called for changes in the way the state taxes businesses. But as June started with no deal over the state budget, separated into several spending plans, Brown relented.
Additional revenue helped Democrats and Republicans reach a deal.
But there could still be some spending disputes. In jeopardy are $670 million in taxes for health care as a Republican Rep. Julie Parrish said she will push to get 58,000 signatures in 90 days to take advantage of Oregon's law that allows voters to delay implementation of a law through a special election.