AP Article on States' Budget Woes Ignores Spending Excesses

Old Media coverage of government budget difficulties usually focuses on the here and now, and all the "tough decisions" that have to be made.

Seldom is there ever an examination of how a state or local government entity got into its current fix. Scratch just a little bit beneath the surface, though, and you'll almost inevitably find that an annoying habit of overspending during the good times has left the state or municipality unprepared for when things go even a little bit sour, as they invariably and eventually do.

Sunday's Associated Press report on the budget situations many states governments face was no exception.

(A full vetting of the article, and a chart showing steep rises in spending in most states, is after the jump)

In it, AP reporter Andrew Welsh-Huggins:

  • Recited a litany of current woes.
  • Failed to mention that most states have allowed spending to greatly exceed inflation during the past several years, and that most are still experiencing increases, though smaller, in tax collections
  • Gave those supporting a second round of federal government assistance (the first occurred mostly during 2003 and 2004) a chance to make their case early in the article, while saving a rebuttal for near its end.
  • Gave unchallenged quotes to advocates of further tax and fee increases.

Here's how Welsh-Huggins presented the big picture:

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," Democratic Gov. Tim Kaine of Virginia said 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 one-time sources of money, such as payments from the 1998 national settlement with major tobacco companies; and the sluggish economy.

What Welsh-Huggins totally ignores is that during the past four years, state and local government spending has exploded, and is now taking a greater share of income than ever, as shown here (Source: The Tax Foundation; HT to the Foundation's William Ahern for guidance provided; more detailed looks at each state can be found here):


This chart blows the excuses presented by Welsh-Huggins for the situation the states find themselves in out of the water. Here are most of them, with retorts provided:

  • From the article: "'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,' Democratic Gov. Tim Kaine of Virginia said on 'Fox News Sunday.'" Retort: Hey Tom, your state's tax burden went up 0.5% in a growing economy; you should have plenty of money for that. Why don't you?
  • From the article: "'The hardest thing I'm going to have to do is face foster-care parents, disabled adults and children,' said Gov. John Baldacci, D-Maine. In his state, there are back-to-back forecasts of revenue shortfalls of about $200 million." Retort: This is from a governor whose state tax burden is now the second-highest in the nation, and is now taking 1.2% more of Mainers' income? Where did all the money go?
  • From the article: Topping the list of troubled states is California. Republican Gov. Arnold Schwarzenegger faces a deficit as high as $16 billion. Retort: See how the Golden State (+1.0%) squanders welfare dollars (at NewsBusters; at BizzyBlog) more than any state in the union. Why not work on that first, before looking at how to make the tax burden even worse?
  • From the article: "In Rhode Island, Republican Gov. Don Carcieri is proposing reducing the state's work force by 1,000 to help address an estimated $385 million shortfall next year. He says the situation is the worst in memory." Retort: That's because your tax-burden increase (+1.2%) must be about "the worst in memory."
  • From the article: "Gov. Jon Corzine, D-N.J., proposed raising turnpike tolls to pay down the state debt and is suggesting budget cuts. Neither idea is popular, but Corzine says the state has to do something, especially when it comes to highway maintenance." Retort: This is from a state that shut down the government in the summer of 2006, and supposedly solved its problems by mostly raising taxes (tax burden up 0.9% in the past four years). Uh-huh.
  • From the article: "In Arizona, Democratic Gov. Janet Napolitano has proposed new borrowing to build schools and shifting some prison costs to counties to address an estimated shortfall of $1.2 billion." Retort: Congrats on the slight decrease (-0.1%) in the tax burden. But borrowing pushes the pain out to the future, but doesn't address the fundamental problem. Unfortunately, other states, including Ohio (+1.4%), are attempting to employ this tactic.

Welsh-Huggins waited until Paragraph 19 to quote South Carolina Governor Mark Sanford, who said that "The idea of borrowing a bunch more money so we can then put it into our pockets so we can then repay it later, I don't think is a great route to go." Since Welsh-Huggins didn't bother to look, he also didn't make the connection that the states which haven't increased their tax burden much, or have in fact reduced it, are, with the exception of Arizona not among the whiners he quoted.

Welsh-Huggins had roughly 700 words to give his readers the full picture. He easily could have, and should have, included information about how the states' profligate spending during the past four years has contributed to their "tough budget times." Why wouldn't he?

Cross-posted at BizzyBlog.com.

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