Question of the Month
February
2002
What were the
Midwestern states’ fiscal situations entering 2002?
North
Dakota stands alone as the
only state in the region currently not facing fiscal difficulties,
though the extent of budget problems in the remaining 10 states
varies.
In December 2001, Ohio
lawmakers approved legislation to make up for a $1.5 billion
shortfall. Faced with a projected $500 million deficit, Illinois
Gov. George Ryan and the General Assembly met late last year to
make cuts to various state agency budgets, but legislation proposed to
give him broader authority to make additional reductions failed. Indiana
Gov. Frank O’Bannon announced in 2001 a freeze on the salaries
of state workers and, early in 2002, proposed additional spending cuts
and some tax increases. Projections indicate that the state still
needs to act legislatively to avoid more than a $1 billion deficit at
the end of the biennium.
After Michigan
Gov. John Engler made $540 million worth of cuts in November 2001,
the Legislature entered this year facing a $900 million projected
shortfall. Kansas faces a $426 million budget deficit in
2002, while projections in early 2002 showed that the Nebraska
Unicameral Legislature had to find ways to make up for at least a
$50 million shortfall. Lawmakers already cut $171 million in a special
November 2001 legislative session. Iowa also met in
special session last year, after Gov. Tom Vilsack made
across-the-board spending cuts of 4.3 percent that saved the state
$200 million and, at least temporarily, balanced the budget.
Minnesota’s
estimated deficit for its current biennial budget is nearly $2
billion. South Dakota has had to fill a $11.6 million
hole this session, while Wisconsin lawmakers are
grappling with ways to eliminate a projected shortfall of more than $1
billion.
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