Stateline Story

State Leaders Struggle With Tough Cuts

If there's one thing Tim Kaine has learned how to do, it's cut a budget. He's done it as a city council member, as mayor and currently as Virginia's governor.

But hacking away at a state budget is no fun. Governors would rather be remembered for improving people's lives, not for laying off workers, raising college tuition, leaving people stuck on traffic-clogged roads or cutting health benefits for vulnerable low-income residents.

"It has been tough," said Kaine, who recently proposed slashing $3 billion over two years to cover a budget gap. "You're making an awful lot of decisions that are affecting people's lives, and you're trying to make them in a way that they have the least negative effect."

Kaine, who will finish the final year of his term this year while also serving as chairman of the Democratic National Committee, is by no means the only anguished governor or state lawmaker. State budget shortfalls could exceed a record $200 billion over the next two years, according to the National Governors Association, which translates into a lot of agonizing spending decisions by state leaders.

The decisions are hard because as political creatures, most governors and state legislators want to ensure their survival and leave a legacy by doing such things as lowering taxes, expanding or creating programs and building public works projects that capture the imagination.

Former Maryland governor William Donald Schaefer (D) built a trend-setting baseball stadium in downtown Baltimore , added an adjacent football stadium and light rail line. In Massachusetts, former Gov. Mitt Romney (R) is remembered for ensuring universal health care for all residents. Bill Clinton (D) in Arkansas and George W. Bush (R) in Texas reformed their states' welfare and education systems, respectively, helping propel them to the White House.

But there's nothing easy about the worst recession since World War II, which will force many state elected officials to make unpopular choices such as increasing taxes and reducing services.

"It's tough not to be scared," Pennsylvania Gov. Ed Rendell (D) said Jan. 4 after announcing the state budget gap in the current year had swelled by $100 million to $1.7 billion. "But we're not going to hide from this recession."

Beyond the human toll on politicians, the recession is forcing a giant re-examination of the role of state government . Governors and lawmakers, partly as a way to rationalize their actions but also because many of them are natural optimists, are casting themselves as reformers. As Washington Gov. Chris Gregoire (D) said, now is a time to "rethink government."

Added Kaine, in a Stateline.org interview: "A crisis is a terrible thing to waste. There is a sense that you get to ask more fundamental questions about government when you are going through this exercise. The best thing about this is we're not only making the right decisions now but we're positioning the state for when the economy improves."

The human toll of the recession on governors was evident at recent budget hearings in Tennessee, though it could have been any of the 43 states with shortfalls. The head of Tennessee's mental health agency asked Gov. Phil Bredesen (D) for $27.8 million to protect as many as 1,200 mentally ill residents scheduled to lose their state health insurance benefits .

"I don't have $27.8 million to give," said Bredesen, whose state is probably looking at a $1 billion shortfall in the coming budget year, which will require up to 20 percent in cuts to state agencies. "You can just forget about that."

Later, in an interview, Bredesen was asked about having to say no to people in need. "I'm not going to tell you this is easy," he said. Such cuts are "very painful," he said, particularly when they involve some of a state government's basic services.

The refrain was similar in South Dakota, where Gov. Mike Rounds (R) last month proposed a budget for the fiscal year beginning July 1 that calls for higher property taxes and fees. During his address to lawmakers, Rounds singled out programs he would like to fund, such as additional laptop computers in high schools, new programs for state colleges and universities and a pay increase for state employees.

Each time Rounds mentioned a program, he said, "I don't have the money."

Rounds realized the speech was such a downer that he announced afterward that he would try to be more optimistic about South Dakota's future when he delivered his annual state of the state speech on Jan. 13. In fact, he used the word "optimistic" 10 times in the speech as when he said, " I'm optimistic about South Dakota today and in the future, and I hope you will be too."

Georgia Gov. Sonny Perdue (R), who has had to cut the state budget twice since he took office in 2003, said that dark economic times often pit lawmakers and interest groups against each other. "We don't argue as much when there's a little extra (money) to go around," he observed.

Georgia lawmakers now in session will have to slash at least $2.2 billion from the current fiscal year budget. To cope, Perdue said, "you have to be an optimist in this job." He also tries to find the humor in every situation, as he did when he spoke about spending cuts to a group of state legislators from around the country attending a National Conference of State Legislatures forum last month in Atlanta .

"For all my colleagues who want limited government, boy they're going to get it," Perdue said to laughter.

In a way that differs from many governors, Kaine said he may be better suited temperamentally for hard times.

"I don't know if it's a Catholic sense that you ought to be doing heavy lifting rather than light lifting," said Kaine, who graduated from an all-boys Jesuit high school in Kansas City , Mo., and spent time as a missionary in Honduras. "You feel fortunate to be able to be in a position to make decisions and use the right balance of head and heart."

Bredesen, who before running for office founded a health care management firm in Nashville , said governors and lawmakers "should not get paralyzed by the negatives" of the economy. "Use it as an opportunity to get beyond hand-wringing and feeling sorry for yourself."

For instance, he said, Tennessee's colleges and universities should take advantage of the budget crisis as a chance to examine the state's higher education system. "Surely there are some programs that are not working out as they had hoped," Bredesen said.

Bredesen's conservative Republican counterpart in South Carolina, Mark Sanford , is one governor who actually enjoys cutting spending. Often that's the politically popular thing to do, although Sanford was recently criticized even by people in his own party for refusing to apply for a federal loan so the state could extend unemployment benefits to jobless workers. Sanford eventually caved in.

In an interview , Sanford said, "My frustration is reverse." Meaning states aren't going far enough to rein in government. He said whoever says going through a recession isn't fun for a governor "needs to read the old Barry Goldwater quote."

The quote from "Conscience of a Conservative," a book by the former Arizona senator, said in part: "I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size…My aim is not to pass laws, but to repeal them. It is not to inaugurate new programs, but to cancel old ones that do violence to the Constitution or that have failed their purpose, or that impose on the people an unwarranted financial burden."

Staff writer Daniel C. Vock contributed to this report.

Tags: Economy