Stateline Story

Report: States Spend Less; More Cuts in the Offing

State spending declined this year to the lowest level in nearly 15 years, according to a new report from the Center on Budget and Policy Priorities to be released today (April 22).

For the fourth year in a row, most states likely will turn to cutting programs to balance their books, said the Washington, D.C.-based center, which focuses on budget policies that affect the poor. States cut expenditures over the last three years to fill budget gaps totaling $250 billion.

State spending as a share of the U.S. economy dipped to 4.60 percent for this fiscal year, down from the average of 4.85 percent between 1990 and 2000, the center said.

The report comes as many states are entering final budget planning stages for fiscal year 2005, which begins July 1 in most states.

The center predicts the cuts will be deeper this year because many states have run out of short-term fixes and many state lawmakers are reluctant to raise taxes.

The report includes examples of proposed cuts in key program areas. California, Florida, Georgia, Missouri and New York, for example, are among states considering cutting health care programs for poor families, the center said. Proposed budgets in California, Connecticut, Illinois, Michigan and New York would cut aid to local governments, the center said. California, Maine, Maryland, Massachusetts and Texas are among the states considering budgets likely to force public universities to increase tuition, it said.