Baton Rouge, La. College students clash with administrators over steeply rising tuition. Public employees shut down statehouses amid cuts to pay and retirement benefits. Teachers and social welfare advocates protest budget cuts. Lawmakers struggle to cope with sharp declines in tax revenue.
If government budgets were once an eye-glazing topic, they moved to the top of the public agenda in 2011 as state and local governments faced some of their most difficult decisions since the national recession began in late 2007.
A fourth year of declining tax revenue meant deep spending cuts and, in many states, a rethinking of the role of government and the scope of the services it should provide.
Budget experts expect last year’s tumult to give way to somewhat steadier times in 2012, as tax revenue continues a slow rebound. But few budget planners are celebrating, as cautious optimism about an uneven economic recovery is leading to subdued expectations.
“There will be no restorations,” said Eileen Klein, chief of staff for Arizona Gov. Jan Brewer. “I hope we can eliminate that word from the budget vernacular.”
The end of a three-year state sales tax increase in 2013 and concerns about Medicaid expansion in 2014 driven by the federal health care overhaul has led the state’s Republican governor and GOP lawmakers, who have a majority in the Legislature, to say they must hold the line against new spending.
The cautiousness in Arizona is an illustration of the continued budget turmoil expected in 2012 throughout much of the nation, even after four years of deep spending cuts.
States have closed budget gaps totaling more than $500 billion since late 2007, with 48 states cutting programs and services. Louisiana, for example, recently trimmed subsidies that are provided to grandparents and other relatives taking care of children who are not their own, ended a program in 10 local jurisdictions to help people find jobs and sliced money for counseling services for at-risk children.
Republican Gov. Bobby Jindal cut public college funding another $50 million this month to help close the latest budget shortfall. Rising tuition has led to rallies on campuses across the country, including some protests that turned violent in California.
Adam Thongsavat, 22, expects the year ahead to be even more active on campuses. The student body president at the University of California, Davis, where campus police pepper-sprayed peaceful demonstrators last fall, said students are angry over rising tuition and a lack of job prospects once they graduate.
In his time as a student, he saw tuition and campus fees at the public university rise by nearly 68 percent, from about $8,000 in 2007 to $13,400 this year.
“I think 2012 will make even optimists pessimistic,” said Thongsavat, who recently graduated with a double major in history and political science. “I think what you’re going to see is a lot more unrest unless leaders in Sacramento, our regents and community leaders take active stances on improving student lives. We’re going to see a lot more of the same, and it’s going to get a lot worse.”
Federal stimulus money approved by Congress when the Democrats were in control helped during the heart of the recession, delaying layoffs of teachers and police officers while moderating cuts to Medicaid and other public health programs. Some states raised taxes and fees and tapped their rainy-day funds.
But even with a trickle of good economic news recently, state officials say no one should expect robust government spending anytime soon. Commitments still exceed incoming tax revenue in many states.
“It’s at a slow pace. But any improvement, no matter how small, is positive news,” said Todd Haggerty, a research analyst at the National Conference of State Legislatures.
Twenty-nine states are spending less from their general funds today than they did before the recession, according to a recent joint survey from the National Governors Association and the National Association of State Budget Officers.