New York’s incoming governor, Democrat Andrew Cuomo, says he won’t raise taxes even though he will inherit a budget deficit of at least $9 billion when he takes office in January. Ohio Republican Gov.-elect John Kasich is promising to cut taxes, despite a shortfall of about $8 billion.
And in California, incoming Democratic Gov. Jerry Brown — who ardently pursued innovative clean- energy and environmental- protection programs during his first stint in office, in the revenue-rich 1970s and ’80s — will have to figure out this time how to close a budget gap projected at more than $25 billion.
Twenty-six states elected new governors last month — 17 Republicans, eight Democrats and one independent — and now they are going to have to reconcile their principles and campaign promises with some harsh fiscal realities: This is the worst budget climate for the states in at least a generation.
Cumulatively, the states face budget shortfalls of nearly $140 billion next year, according to the Center on Budget and Policy Priorities, a Washington think tank. To make matters worse, billions in aid to states from the federal government’s $800 billion stimulus plan is set to dry up early next year.
The incoming governors face some painful and politically unpopular decisions, with the easy fixes long gone.
Bob Williams of the conservative think tank State Budget Solutions said new governors will be able to take a fresh look at the proper role of state government.
“You have to redesign and refocus state governments around what are the real functions of state government. If it’s not a core function, don’t do it,” he said.
But even that prescription doesn’t give governors much room to maneuver.
A study by the Pew Center on the States and the Public Policy Institute of California of five fiscally troubled states found voters believe education and health care are the core functions of government and should not be cut, even though they eat up a majority of most state budgets — in some cases up to two-thirds of all spending.
Kasich wants to cut taxes and campaigned on a promise to try to phase out the state’s income tax. To trim costs, he has proposed diverting nonviolent offenders from prisons and taking on public-employee unions.