State Budgets

American states are struggling with their worst financial problems in about sixty years. I'm Steve Ember with Phoebe Zimmermann. Today we report about money troubles in the fifty states on our VOA Special English program, THIS IS AMERICA.

American states are facing hard financial times. They are struggling with their worst money problems since World War Two. Their main support, the federal government, is paying for damages caused by the terrorist attacks of September eleventh, two-thousand-one. The federal government is paying for protection against further attacks. It is paying for wars in Afghanistan and Iraq. The states say all this leaves them without the money they need to provide for their citizens' needs.

States depend on federal money for help called grants-in-aid. The states then are responsible for helping their local governments and agencies.

The states lack thousands of millions of dollars at a time when their citizens need help the most. The American economy is weak. Last month, for example, the unemployment rate reached its highest level so far this year. Many companies are closing. Or they have suspended workers. Millions of Americans have lost money in retirement plans and stock-market investments. Millions of others have no insurance plan for financial help for medical needs.

The states also have more people to care for these days. The national population count of two-thousand showed that only the District of Columbia did not gain population. Some states, like Nevada, grew at a huge rate. In some areas the recent arrival of many people from foreign nations has greatly increased demand for social services. New York, America's most heavily populated city, is under intense pressure to provide for poor people. So is Los Angeles, California, the second most populous city.

The states' lack of money shows itself in many ways. For example, some teachers in the state of Oklahoma are cleaning schools and preparing food. The educational system cannot pay for cleaning workers or cooks. Big states like Texas and California are releasing thousands of prisoners before their sentences are ended.

Over just two years, students are paying almost twenty percent more to attend state colleges in Nebraska. And the state has stopped providing health care for almost twenty-five- thousand mothers who are poor.

Other states are closing parks. They are cutting the operating hours of libraries. Roads are not being repaired. Some public transportation has been withdrawn. A small town in Michigan is considering selling space on their police cars for sales messages.

The states currently face cutting about seventy-five thousand million dollars from their budgets. That is for this year and next year. In the future many states will need more money for almost all their services. They must provide their growing populations with roads, education and social services. They must help provide for health and health centers.

States also must try to make their citizens safe from terrorist attacks. State officials say the federal government has given them many security responsibilities. But they say there is not enough money to pay for them. In some states, for example, police and fire forces are being reduced. This is true although these officials are the first to respond in case of terrorism.

Every American state has an organization that makes laws. All the states except one have a senate and a house of state representatives, delegates or assembly members. Only Nebraska has one just legislative house.

Most states' agencies ask the governor for the money they want. For example, the motor vehicle department asks for whatever amount it needs to operate. The governor considers all such requests. The governor then proposes a state budget and sends it to the legislature.

Lawmakers must decide about all the proposed amounts. The legislators debate. Usually, they must compromise. This is often a painful process. But after awhile they pass a budget. This measure goes to the governor to sign or reject.

States receive income from other sources besides the federal government. States tax tobacco products, cars and individual and company incomes. They tax gifts, payments to workers and the use of natural resources. But almost forty states are saying they expected too much money from these sources.

The law requires most states to pass a budget by the end of June. The budget must be balanced. States usually get help from federal tax returns. But last year they did not get this help. If this happens again, experts say many states are in deep trouble.

Twenty-seven states cannot raise the money they have budgeted. Thirty-four states are having to spend more money than they planned. Most blame this on health care programs, especially those for the poor. Many federal programs make costly requirements of states for health care. For example, the Americans with Disabilities Act says states must help poor people who need long-term medical care. This is costly.

Common solutions exist for the problem of too little money for too many public needs. One is to raise state taxes. Another is to borrow money.

The eastern state of Massachusetts has been facing financial crisis. It expects to fall three-thousand-million dollars short of its budget for two-thousand-four. Massachusetts' money problems are the worst in ten years. Still, legislators say there is little chance tax increases will pass this year.

The budget cuts that some lawmakers have called for demonstrate the limitations that may affect state citizens. Between three-thousand and five-thousand state workers could be suspended. Colleges and universities could lose one-hundred-seventy million dollars in aid.

Massachusetts provides reduced drug costs for eighty-thousand old people. This program could be reduced by ninety-seven-million dollars.

As you might expect, angry activists immediately condemned the proposals. They point to the suffering they say the cuts would cause old people, sick people and students. Angry people throughout the country are demanding a solution to their states' money problems.

Some public officials believe they have found a way to deal with the problems. They believe gambling – games of chance -- can rescue state budgets.

For years, many public officials wanted to ban or severely limit gambling. Some said games of chance were immoral. Others worried because gambling can become an addiction – something people cannot control. Gambling addicts sometimes lose all their money, causing deep harm to their families and society. But a growing number of states are using gambling to help their financial problems.

Gambling in the United States is estimated to be about a fifty-thousand-million-dollar business. Recently about half the states have decided to try to get some of this money for their services. For many years states taxed gambling to limit or end it. Now, states want gambling so they can tax it for profit.Supporters see gambling as a way to raise money for better schools and better teachers. They believe it can make their states richer and more productive. They see gambling as a rescue for people in need.

Some state lawmakers have proposed more gambling clubs and expansion of state competitions called lotteries. They also are trying to get bigger payments from American Indian gambling clubs. Gambling provides important financial help for many tribes. Indians are permitted to operate these clubs under a nineteen-eighty-eight act of Congress.

The Maryland House of Delegates has rejected a slot-machine proposal by Republican Governor Robert L. Ehrlich Junior. But the delegates also voted to study placing these machines at horse-racing centers in the future. Players put metal money—coins – into slot machines. In return, they get a chance to win more money.

A Maryland delegate who opposes slot-machines at the racing centers says they are a bad influence. He says this is true especially for poor people. This legislator believes increasing chances to gamble make poor people even more poor.

Economists argue about gambling and taxes and loans to correct states' financial problems. One expert says there is only one solution. For the states to recover financially, he says the whole nation must make a strong economic recovery.

This program was written by Jerilyn Watson. It was produced by Mario Ritter. I'm Phoebe Zimmermann. And I'm Steve Ember. Join us again next week for another report about life in America on our VOA Special English program, THIS IS AMERICA.