Some schools in Colorado are cutting back to a four-day week. Portland, Oregon, schools will have to shorten their school year now that a state referendum to raise the income tax failed. The city of Minneapolis is proposing to eliminate 289 teaching jobs and increase class sizes next year as part of an effort to plug a projected $28.6 million gap in its fiscal 2004 budget.

A faith-based group in Wake Forest, North Carolina, wants to help children with the emotional fallout from divorcing parents but is having trouble finding funds to match its challenge grant. The Court Appointed Child Advocates program in Dane County, Wisconsin, which sends volunteers to check on homes where there are allegations of child abuse and neglect, is facing a 13.5 percent budget cut. The directors of after-school programs in Washington, DC, are worried about having to turn children away or close their doors.

Lutheran Community Services Northwest in Washington State is cutting back on services aimed at strengthening and preserving families at risk, and eliminating home visits to “low risk” families. The Tompkins County Department of Social Services in New York is no longer taking referrals for its family preservation program, which is being discontinued due to budget cuts. The Connecticut Children’s Health Council’s contract to monitor the quality of care provided to poor children is being terminated and the state’s Family Service Agencies have been told to stop accepting new families into their Safety Net program, which helps low-income families struggling with issues such as alcoholism, drug addiction, or other problems.

This is the news from the front lines—from people all around the country who are working overtime to fill the growing gaps as states and communities face the fallout from state budget shortfalls.

Some people respond with resignation to such tales. Some dismiss them as far away. Some say government should play a smaller role in people’s lives anyway, arguing for greater private efforts—including volunteerism and community fundraising—to address community needs.

But I say we can’t run the country on bake sales, candy stripers and silent auctions alone. Schools and tutoring programs—not to mention community mainstays like fire stations and community health centers—have payrolls to meet, equipment to maintain, supplies to buy and rents to pay. And their ability to maintain their services is being undercut by the end of the ’90s boom, cutbacks in charitable giving from individuals and foundations, and budget cuts passed on from the states to local communities and programs.

Most states do not relish cutting funding for public schools, colleges, child care, health care, and services for children and families. But with unprecedented budget shortfalls deepening at alarming rates, they are between a rock and a hard place. The National Conference of State Legislatures says states have already closed deep budget gaps for last year’s budgets, but are facing shortfalls of nearly $26 billion between now and June. And next year looks worse—with not all states reporting, there is a cumulative gap estimated to total at least $68.5 billion for FY 2004.

Were states reckless in the late ’90s boom? Certainly a case can be made that locking in tax cuts during good times was foolish, given how hard it is to restore taxes during hard times. A case could also be made that states spent some funds unwisely. On the other hand, many states strengthened their programs of quality child care assistance and job training so low-wage parents could get and keep good jobs. Some states filled the gap for legal immigrant families who lost their food stamps and welfare assistance due to federal funding cuts. I call actions like those a good investment in families and children.

But an unprecedented drop in tax revenues and a faltering economy is putting a squeeze on state budgets. Except for Vermont, the only state which permits deficit budgeting, states don’t have the option of putting school spending and health coverage on a credit card while they wait for higher revenues to come in. They must balance their books each year.

Most states have already used up their rainy day funds and applied some accounting gimmicks. Now they must cut spending and lay off workers. In doing so, they not only hurt real families and real communities, they also inadvertently put a drag on the economy by cutting spending and/or raising taxes at the very time when we need to increase demand and jumpstart job growth.

States still have options. They can use this crisis as an opportunity to begin the essential debate over how to restructure their revenue base—how to reform their taxes so that their revenues are stable and fair. They can close loopholes that unfairly advantage specific businesses. They can raise the taxes they lowered during the good times.

Or, as some are urging, they can use the budget crises to end government as we know it, shrinking services and ending guarantees in Medicaid, Food Stamps and other basic programs.

The states are facing excruciating choices. Even conservative governors, like Gov. Kempthorne of Idaho, are beginning to say they will not dismantle their states’ vital services even if it means raising taxes.

Many economists say the most effective way to stimulate our sagging economy is to give states federal dollars—dollars that will be spent quickly for immediate needs and investments. There are a number of stimulus packages proposed—from governors, congressmen, senators, mayors—and every single one of them includes some immediate fiscal relief to the states, with the sole exception of the President’s budget plan.

President Bush’s high-priced tax cuts would hurt state budgets directly by cutting at least $64 billion out of state revenues over 10 years. That’s because many states use residents’ federal tax information as the basis of calculating their state tax bill.

While imposing increased obligations in education and homeland security on state budgets, the administration’s spending choices fail to offer states any fiscal relief.

It’s hard for people to think of what they see in their communities as in any way connected to decisions made in their state capital, or in Washington, DC. But when it comes to budgets and taxes, these decisions can have a big impact on little neighborhoods.

If we want a better deal for communities and families, we need a better deal for states in these difficult times. That means we need a better plan—a plan that offers states immediate relief, stimulates job growth and maintains fiscal responsibility for long-term economic growth and stability.

While states are struggling to fix their budgets, now is the time Congress is debating the priorities in the federal budget. Now’s the time for lawmakers in Washington, DC, to set the right priorities and put our taxes to work for our states, our communities and our families.

Be sure to check out our slide show on the state budget crises.

Resources:

• National Conference of State Legislatures
• Center on Budget and Policy Priorities
• American Federation of State, County and Municipal Employees

Jan Richter is advocacy director of Connect for Kids.