State Cuts to Education, Health Care Will Slow Recovery

We have written about the negative impact that deep cuts to state funding will have for Pennsylvania children, seniors and our economy. Now a new report from the Center on Budget and Policy Priorities shows that we aren't alone.

At least 38 of the 47 states with new 2011-12 budgets are cutting K-12 education, higher education, health care, or other key public services, according to the report. As Policy Analyst Erica Williams writes at the Center's Off the Charts Blog:

While states continue to face rising numbers of children enrolled in public schools, students enrolled in universities, and seniors eligible for health and long-term care services, most states (37 of 44 states for which data are available) plan to spend less on services in 2012 than they spent in 2008, adjusted for inflation — in some cases, much less.

State lawmakers no doubt faced tough decisions this year, with revenues still far below pre-recession levels and emergency federal aid all but expired.  Still, our review shows that the cuts are unnecessarily harmful, unbalanced, and counterproductive.

Pennsylvania is among that group spending less in 2012 than in 2008 (adjusted for inflation):

Most States' FY12 Spending Below Pre-Recession Levels

Few states took a balanced approach to budget shortfalls. Only five states — Connecticut, Hawaii, Maryland, Nevada, and Illinois — raised new revenues in addition to making spending cuts, the report finds.

The impact goes well beyond the families, children and seniors who will be directly affected by service losses. As Erica Williams writes:

The cuts-only approach that most states have taken will slow the recovery and weaken the nation’s economy over the long term.  State and local governments already have shed 577,000 jobs since August 2008; another round of cuts will lead to further job loss in the months ahead.  The cuts will also lead states to cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals — all steps that remove demand from the economy.  And, by diminishing the quality of elementary and high schools, making college less affordable, and reducing residents’ access to health care, states threaten to make the U.S. economy less competitive in coming decades.

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