Compared to the other states with late budgets,
California's budget deficit is far larger; however, budget problems in other
states may prove much more challenging, and several states with majority-vote
budgets have missed their deadlines.
A recent report in The Sacramento Bee
noted that Nevada has been hit hard by California's economic problems, a
decline in tourism, Indian gaming in California, and the housing market fallout
that has lead to an unemployment rate of 14 percent. Nevada lawmakers now are
considering imposing a state income tax. Brian Bonnenfant
of the Center for Regional Studies at the University of Nevada, Reno said: "Our
best hope right now is a California recovery."
Massachusetts'
budget was signed June 30, one day before the new budget year started. The Boston Globe reported July 1 that
while Governor Deval Patrick submitted a budget in
January that protected education and local funds, the budget he signed made "deep
cuts" to K-12 and higher education, low-income health care, and social
services. The paper also reported that the cuts could have been worse, but the
state had a rainy day fund to draw from. The Democratic governor also approved
budget language that would prohibit undocumented immigrants from obtaining
social services.
In Pennsylvania, for
the first time in eight years, lawmakers approved a budget before the start of the
fiscal year. However, a July 1 editorial in The
Mercury notes that many of the
solutions are gimmicks based on a tax increase that has yet to be enacted and
federal funding that has yet to be approved.
New York is facing
one of the biggest budget challenges in recent history. The New York
Legislature can pass a budget and increase taxes by a majority vote. Democrats
hold a majority in both houses, and lawmakers are now more than four months
late in passing a budget. Parts were passed this week without a revenue bill,
and Governor David Paterson is in the process of vetoing parts of the budget
bill.
New York State
Senate Democratic Leader John Sampson told the media that the Legislature will
be adjourning soon, and he does not expect a budget to be approved until
August. The legislative budget, opposed by the governor, includes a tax
increase on hedge fund managers who work in New York but live out of state; a
proposal to make online travel sites collect sales taxes; a tax increase on
sales of clothing and shoes; and a tax change prohibiting high-income New
Yorkers from claiming charitable donations as tax write-offs.
A report from the
Citizens Research Council (CRC) of Michigan said New York's problems are not a
new phenomenon. New York failed to adopt a budget by the start of the state's
fiscal year during a 20-year period from 1985 through 2004. The state managed
to get by without formal budgets by adopting "interim" budgets to
provide quick fixes until more detailed budgets could be approved.
The report added
that Michigan lawmakers generally have approved a new state budget before the
start of its fiscal year on October 1, but in 2007, a late state budget led to
what the Citizens Research Council called a "government shutdown."
The report
concluded: "While some reforms might focus on changing the process to
ensure timely budget passage, few reforms, if any, can effectively address the
political realities surrounding the budget process. When political control is
divided between the two chambers, or the governor is from a different party
than the legislature, consensus on State spending policy will almost always be
more difficult to achieve and thus take longer. Such delays certainly will be
exacerbated during times of fiscal challenge. Further adding to the delays will
be the level of legislative experience in dealing with very complex public
spending issues during austere times."
The findings are in
line with information provided by the National Conference of State Legislatures
(NCSL), which reports that nine states began the last fiscal year without a budget
in place, and eight of those states have majority-vote budgets. California is
the only one of the nine late-budget states that has a supermajority vote
requirement. Two other states have supermajority vote requirements, and both
started the fiscal year with budgets in place. (Cal-Tax: California legislators also
have been able to pass the state budget on time under the existing system –
under the two-thirds requirement, enacted in 1933, state lawmakers passed
budgets on time for many years.)
NCSL also reported
that this year, many states with majority-vote budgets are having trouble
putting budgets together. The group explained: "California and New York
are the only states that have missed passing the budget by the start of FY 2011
(Michigan has yet to enact a budget and has a fiscal year beginning on October
1). While others did not miss the critical July 1 date – the start of the
fiscal year for 46 states – nine states have needed to extend their sessions or
meet in special sessions to deliberate on the budget."
Cal-TaxReports, July 6, 2010
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Association.
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