Wyoming, though, is sitting on a relatively comfortable $63 million surplus.
Across the country, state coffers are starting to reflect the economic fallout from the terrorist attacks of Sept. 11 and from the general slowing of the economy, according to a Stateline.org survey of the fifty states released late last week.
For a handful of states, including Wyoming and Texas, the news is good, or at least not too bad, yet. Revenues in those states are matching estimates and, in some cases, even exceeding estimates. Nevertheless, officials say they will be keeping a close eye on things in the coming months.
But for the vast majority of states, including California, Florida, Ohio and Tennessee, the news is troubling, and is likely to get worse before it gets better. For months, these states have been taking in fewer tax dollars than expected -- a trend accelerated by the attacks. Swelling unemployment ranks, stock-market losses and strengthened security and public health measures are further straining limited resources.
In the Stateline.org survey, 40 states reported fiscal problems, ranging from mildly depressed revenues in Idaho to a severe budget shortfall in neighboring Washington.
Ten states -- Wyoming, Texas, Alaska, Louisiana, Montana, New Mexico, North Dakota, Oklahoma, South Dakota and West Virginia -- enjoyed a more positive fiscal outlook. The common denominator among these states is strong oil, gas and mineral industries. They usually do well when everyone else is hurting, and, this year, those states continue that trend.
At least 15 states have made budget cuts or have frozen spending since the attacks or have plans to do so soon. They are: Connecticut, Georgia, Illinois, Indiana, Iowa, Maine, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Vermont and Washington.
Few state officials seem willing to attribute their budget problems to the terrorist attacks. Instead, they say the attacks appear to have widened fissures already present long before Sept. 11.
"I dont know that Id attribute any of it to the attack, although the attack is an extraordinary and aggravating factor," said Vermonts Commissioner of Finance and Management, Sean Campbell, noting that Vermont agencies have already trimmed spending one percent and anticipate another round of cuts soon. "Where I would say September 11 is changing our thinking is in how deep and how long this will be."
In Connecticut and Wisconsin, two states already working to heal troubled budgets, Govs. John Rowland and Scott McCallum cited a direct link between the attacks upon New York City and Washington, D.C., and their states freshly opened fiscal wounds.
"We were doing fine until Sept. 11," McCallum told reporters last month, a mere three weeks after he signed a budget containing five percent across-the-board reductions.
Starting late last year, announcements of budget cuts, layoffs and revenue shortfalls began trickling out of state capitals at an ever-increasing rate. Since the attacks, the trickle has become a steady flow, as many more state officials have taken to podiums to deliver bad economic news.
Their rhetoric ranges from cautious to alarming.
"It is by no means a sky is falling issue," said Rhode Island House policy analyst Gary Ciminero, referring to a prediction that the states income tax revenue alone could fall $45 million to $50 million below estimates this year.
Tennessee Gov. Don Sundquist employed a movie analogy to highlight the precarious fiscal situation his state finds itself in.
"Have you seen the movie "The Perfect Storm?" Where everything converges to create a complete disaster? What you saw today was the perfect storm," Sundquist said last Wednesday after hearing budget officials tell legislators the state could be short at least $275 million by next June 30.
Tennessee is in trouble because it has only $175 million in reserves. The state used the entirety of its share of the national tobacco settlement -- a significant source or revenue for many states -- to balance this years budget.
At least four states -- Arizona, Florida, Hawaii and Nebraska -- will reconvene their legislatures in the next couple of months to explore ways to ease their budget crunches. The obvious ways out are program cuts or tax increases, although the latter appear to be off the table in most states.
Legislators from California, Connecticut, Oregon and Washington may soon be called back to their state capitols as well, although special sessions in these states are not definite.
Jason White and John Nagy, Stateline.org
