Friday, October 23, 2009

US state budget woes lead to service cuts

I was struck by a story that Hawaii's public schools will be closed in the first of 17 "furlough Fridays" that will see a drastic cut in school time for up to 171,000 children. The reduction of the school week from five to four days will last for at least the next two years. The cut is due to the decline in state revenues following the downturn.

Then, checking, I found a useful story from the Centre of Budget and Policy that provides an overview of the budget effects across US states. I quote from one element:  

Every state save Vermont has some sort of balanced-budget law. So the shortfalls for 2009 and most of the shortfalls for 2010 have already been closed through a combination of spending cuts, withdrawals from reserves, revenue increases, and use of federal stimulus dollars.

But in over half the states, new gaps have recently emerged for 2010, as revenues have fallen short of the projections on which the 2010 budgets were based (even though the projections themselves seemed pessimistic at the time). Already, 26 states have identified mid-year gaps — some but not all of which have already been addressed through spending cuts or other measures — totaling $16 billion or 4 percent of these budgets.

Hawaii is not alone. The problem would be much worse were in not for Federal Government assistance.

At this distance I am not knowledgeable enough to comment on the detail of the US position. However, the capacity of the US public to impose or accept ideological positions - mandated balanced budget laws among others is an ideological position - is a little remarkable.

Australia does this too of course, and I am talking about Australian Governments as a whole, but ideology tends to be tempered a little by pragmatism.

Am I being fair when I say this?     

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