Governors' Survey Documents States' Fiscal Woes

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Many state governments are in a worse fiscal condition than they were a year ago, according to a survey conducted by the National Governors' Association and the National Association of State Budget Officers.

Revenue shortfalls resulting from lower economic growth rates have created tight budgets for education and many other state programs, reports the 1990 "Fiscal Survey of the States."

The study also documents the spread of fiscal problems to areas outside of New England, where states have been confronting severe financial difficulties for the past year. (See Education Week, Feb. 21, 1990.)

The "economic slowdown that plunged a handful of Northeastern states into distress in fiscal 1989 has become evident down the Eastern Seaboard," the report says.

Because of their weakening economies, a number of states have been forced to hold down spending or raise taxes in order to meet their constitutional mandate for a balanced budget, the report shows.

Six governors proposed actual reductions in spending for fiscal 1991, it says, while 24 proposed spending increases of less than 5 percent over the previous year.

And for the upcoming fiscal year, the report says, governors and legislatures are considering tax-increase proposals totaling more than $4.9 billion--an unusual development, it notes, during a year in which 36 governorships are up for election.

Many states that were fiscally healthy last year have shortfalls this year, the report adds.

"A year ago, states were reporting revenues that exceeded original estimates," said Gerald H. Miller, executive director of n.a.s.b.o. "This year, they report revenues below original estimates."

For state education programs, the fiscal situation could be especially grim, a statement accompanying the report warns.

It notes that K-12 enrollment is expected to rise to 48 million by 1993, from 45.6 million this year.

That increase, coupled with the n.g.a.'s commitment to achieve the national goals it has forged with the Bush Administration, will cause education expenditures to grow, according to the statement.

Copies of the report are available for $20 each from the nga, 444 North Capitol St., Suite 250, Washington, D.C. 20001-1572; (202) 624-5300.--m.n.

Vol. 09, Issue 30

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