Governing Magazine’s Annual Outlook in the States and Localities conference was held in Washington this past week, bringing its focus on fiscal struggles facing state and local governments across the country. From their own coverage:
State revenue receipts are down 12 percent from their pre-recession peak, and states have already sliced a combined $430 billion from the 2009, 2010 and 2011 budgets. While the majority of states aren’t facing budget gaps for the current year, the looming loss of federal funds through the American Recovery and Reinvestment Act means that most states are projecting major revenue gaps for next year. When stimulus dollars run out in June, that’s over $150 billion in flexible funds that will no longer be at states’ disposal. “We’re going to see austere state budgets for the next several years,” said Scott Pattison, executive director of the National Association of State Budget Officers. After outright declines in state spending over the past two years, sales tax and income tax revenues will rebound in 2011 and 2012, Pattison said. “But it won’t be enough new growth to make up for the loss of the stimulus funds and the rising costs of health care.”
Exacerabating the problem is the fact that states have already spent the past few years enacting bleeding-edge cuts to discretionary programs. “The low-hanging fruit is gone,” Pattison said. “Even the medium high-hanging fruit is gone. So the pain is going to be worse, even though the data may start looking better.”
Among the speakers at the event was Maryland Governor Martin O’Malley, who commented on the value of program evaluation as a guide for touch decisions:
One bright spot of optimism came from Maryland Gov. Martin O’Malley, who discussed the ways that a dedicated focus on performance measurement has helped his state weather the fiscal storm better than most. In this time of economic uncertainty, O’Malley said, “openly measuring the performance of our public institutions, and communicating that performance to citizens, has never been more important.” States that blindly react to the downturn with across-the-board cuts won’t ultimately be successful, he said. “The states that win will be the states that […] manage for results.”
