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Governors battle with tight budgets

Consider pressing Congress for aid

Email|Print| Text size + By Andrew Welsh-Huggins
Associated Press / February 25, 2008

WASHINGTON - Governor Christine 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 get underway.

"Everything's been going great for us and now the national downturn has slowed us up," said Gregoire, a Democrat.

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 Tim Kaine of Virginia, a Democrat, said yesterday 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 onetime sources of money, such as payments from the 1998 national settlement with major tobacco companies; and the sluggish economy.

"The hardest thing I'm going to have to do is face foster care parents, disabled adults, and children," said Governor John Baldacci, Democrat of Maine. In his state, there are back-to-back forecasts of revenue shortfalls of about $200 million.

Topping the list of troubled states is California. Governor Arnold Schwarzenegger, a Republican, faces a deficit as high as $16 billion.

"For a lot of the folks they're either there and it's really awful, like California, or they're worried it's going to happen to them," said Scott Pattison, executive director of the National Association of State Budget Officers.

"Tough, very tough," is how Governor Jim Doyle of Wisconsin characterized his state's problems, which include a $600 million shortfall.

"We're going to have make cuts. We're going to have to defer some things we were intending to do, put some things off that we wanted to get done," he said.

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