State budgets were due Friday, marking the end of one of the most contentious legislative seasons in recent memory, and the first day of the new fiscal year for most states.
After years of painful cuts and layoffs, and with the economy still stagnant and federal stimulus money dried up, governors and state lawmakers across the U.S. had to close a combined $103 billion in shortfalls this year.
The task resulted in heated debates over spending cuts and taxes between Democrats and Republicans in state capitols across the nation. Here’s a look at who came out on top and who took a hit during the 2011 state budget battles.
Despite months of protests, bitter legal battles, a Supreme Court special election recount, and nine campaigns to recall state senators, Wisconsin Gov. Scott Walker appears to have won the battle and the war.
The first-term Republican signed a state spending bill this week that closely mirrors the budget he proposed during the showdown in Madison this spring. The two-year $66 billion budget fulfils Walker's promise not raise taxes, balancing the budget with a variety of cuts including $800 million from K-12 education, $500 million from Medicaid and $250 million from Wisconsin's university system.
With Walker's signing of the bill, Wisconsin's new collective bargaining law goes into effect. The law -- which has sharply divided the state -- limits public-sector union negotiating rights and increases state employee pension and healthcare contributions.
New York Gov. Andrew Cuomo successfully closed a $10 billion budget deficit without new taxes -- and with the overwhelming support of the state legislature.
The Democrat relied on steep spending cuts to New York schools and hospitals to close the budget gap, along with closing seven state prisons.
After the budget passed, Cuomo's popularity rating soared to 73 per cent, with 54 per cent of state residents approving of his job performance.
Overall, the end of Cuomo's first legislative session was impressive, with the governor shepherding through a property tax cap and a bill allowing same-sex marriages in New York state.
Democratic Gov. Jerry Brown signed California's second on-time, balanced budget in a decade with little fanfare yesterday, calling it 'honest but painful.'
Although Brown failed to deliver a bipartisan spending plan, the governor came out of budget talks looking like a reasonable and accountable public servant -- a rarity in U.S. budget debates this year. His historic veto of his own party's sham budget -- which Brown lambasted as accounting gimmickry -- forced lawmakers to work without pay to come up with a workable solution.
To be sure, California's $85.9 billion spending plan relies on economic improvement and major cuts -- including $3 billion in payments to schools, $1.3 billion in California's university systems and 70 state park closures -- to close the state's roughly $25 billion deficit. If the rosy economic projections don't pan out more cuts are definitely in store.
Brown's no-nonsense leadership has already shifted the blame onto Republican lawmakers, who have failed to negotiate any new fiscal or regulatory reforms., largely due to their unwillingness to put tax increases to a vote.
Republican Gov. Chris Christie averted a state shutdown Thursday night, paring down the Democratic-controlled state Legislature's spending bill with aggressive line-item vetoes.
Overall, Christie vetoed more than $1.3 billion to achieve a $29.7 billion state budget that slashes spending, largely to state municipal and school aid. The NYT notes that the budget is a major victory for Christie's ongoing campaign to reduce government spending and resuscitate the Garden State's ailing fiscal health.
The spending bill is the governor's second legislative home run in as many weeks after the state Legislature passed a bill last week that increases government employee pension contributions and limits collective bargaining rights for New Jersey's public-sector unions.
With help from Ohio's GOP-controlled state Legislature, first-term Republican Gov. John Kasich has successfully railroaded through his legislative agenda -- and sharply divided the state -- over the past six months.
The state's $55.8 billion two-year spending bill encompasses many of Kasich's plans for Ohio and is considered a game-changer for the state government. The bill includes provisions that will privatize several state prisons, overhaul Medicaid, ban most abortions in public hospitals, and tie teacher salaries to student achievement. It also eliminates Ohio's estate tax and sharply cuts state aid to local governments.
Just minutes before last night's deadline Republican Gov. Tom Corbett signed Pennsylvania's spending bill, finalising the state's budget on time for the first time in nine years.
The $27.15 billion budget plan is a victory for Pennsylvania's GOP-controlled legislature. Republicans fought hard -- and ultimately succeeded -- to get a bill that cuts spending by nearly $1 billion without raising taxes.
Corbett also won a major legislative victory with the passage of a bill limiting school districts' ability to raise property taxes without voter approval. The governor had said he would not sign a budget that did not include the bill.
The Minnesota government shut down today after Republican lawmakers and Democratic Gov. Mark Dayton failed to come to an agreement over how to close a $5 billion budget deficit.
Now road construction projects across the state have come to a halt, and state parks, highway rest stops and the zoo have closed down during one of the busiest weekends of the year.
The Minneapolis Star Tribune reports that dozens of state-funded social services facilities, women's shelters to drug treatment centres, are still fighting for funding to remain open during the shutdown,
Meanwhile, talks between Dayton and the legislature have stalled over tax increases and spending cuts. The two sides are reportedly about $1.4 billion apart from reaching an agreement -- with no end to the shutdown in sight.
Connecticut public employee unions rejected an agreement last week for a two-year wage freeze that would have avoided layoffs in the hopes that they could win a better deal from Democratic Gov. Dan Malloy and the Democrat-controlled state Legislature. They were sorely disappointed.
Malloy announced he would lay off 5,500 state workers and cut two per cent of state funding for municipalities to close the $1.6 billion gap left by the unions.
But Connecticut lawmakers dismissed Malloy's proposal as politically untenable, rejecting the municipal cuts and forcing the governor to lay off an additional 1,000 state employees.
Republican Gov. Nikki Haley was dealt a huge blow from her own party this week, when South Carolina's Republican-controlled Legislature overrode all but eight of Haley's 35 line-item budget vetoes. The final budget contained only $508,000 of the governor's $212 million proposed spending cuts.
Lawmakers voted rejected Haley's cuts to public school programs, job-training programs, and economic development, and restored spending for a conservation program and the state Arts Commission.
The Legislature also reversed Haley's decision to eliminate state funding for the South Carolina Republican primary next year -- which would have cost the first-in-the-South state millions in advertising dollars and untold influence over the Republican nomination. The primary is now back on.
Although Illinois passed a new state budget at the eleventh hour last night, the state ends the old fiscal year with $8.3 billion in unpaid bills.
About half of that money is owed to at least 8,000 state vendors, ranging from food distributors to healthcare providers. Other obligations include $850 million of corporate tax refunds, $750 million to repay interfund borrowing, and $1.2 billion owed to state employee health insurance, Reuters reports.
A package of bills that would have let Illinois issue $6.2 billion of bonds to pay the bills failed to pass the state Legislature. Without the bonds the 2011 bills will have to be paid by the end of December, adding further pressure to Illinois' huge structural deficit.
Although Florida Gov. Rick Scott was able to successfully pass a state budget that cut spending by about $4 billion, the first-term Republican's belt-tightening measures have left him pretty unpopular with Florida voters.
Scott's $69.7 billion budget avoids tax increases with huge spending cuts, including slashing $1.35 billion in K-12 education and more than $1 billion in Medicaid cuts. The budget will eliminate about 4,500 positions in the state government.
The governor's approval ratings sunk to an all-time low this month, as residents start to feel the effects of the cuts. Nearly six in 10 Florida voters now say they disapprove of Scott's job performance, according to a recent Quinnipiac University poll.
In addition to being the deadline for most state budgets, July 1 marked the day Washington officially pulled the plug on nearly $100 billion of federal stimulus money to help states deal with the growing costs of Medicaid.
Although state tax revenues have improved since the stimulus funds were granted in 2009, revenues are still not enough to pay for ballooning Medicaid costs. The low-income healthcare program now consumes about 22% of states' budgets in 2010-- more than education, prisons and transportation.
Reuters reports that 43 states made Medicaid cuts as part of their budgets for next year and at least 15 moved to overhaul the program.
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