Governors Wrestle With Tight Budgets

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The New York Sun

WASHINGTON — Governor Gregoire of Washington should be celebrating her state’s robust economy and record exports. Yet sagging tax collections are lowering an estimated budget surplus by $400 million.

In this slow economy, states are struggling. People are spending less, and state governments are taking in fewer dollars. The financial bottom line is a top worry for many governors in discussions as their annual meeting about paying for public works and energy projects.

“Everything’s been going great for us and now the national downturn has slowed us up,” Ms. Gregoire, a Democrat, said. As many as 18 states have deficits, totaling $14 billion in the current budget, and 20 forecast spending shortfalls for 2009 — $34 billion when combined. It is so bad that some governors are debating whether to pressure Congress for a second economic aid plan; this one would focus on upgrading roads, bridges, and sewer systems.

“Stimulus that would focus upon infrastructure would be both great for jobs but also would really speak to a need that we’re seeing around the country,” Governor Kaine, a Democrat of Virginia, said on “Fox News Sunday.”

Governors cite a variety of factors for their economic woes: proposed new federal rules to limit Medicaid spending; relying too much on one-time sources of money, and the sluggish economy.


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