For Immediate Release
Thursday, February 14, 2002
New Report Shows Already Reeling States Would Be Hit Hard by Proposed Bush Budget
EPI Findings Support AFSCME's Four-Point Plan for Tackling Rising Shortfalls
WASHINGTON —A new report released today by the Economic Policy Institute (EPI) shows that the more than 40 state and local governments currently struggling to balance their budgets and deliver vital public services to their residents would be seriously hurt by the Bush FY 2003 budget plan's major cuts in assistance for key domestic programs.
The EPI report released today, Budgeting Beyond the Beltway: How the Federal Budget Imperils State and Local Finances, examines state-by-state the Bush budget's impact on 38 of the largest federal grant-in-aid programs and finds that almost all of the states would see cuts in aid, with New York taking the biggest hit with an eight percent loss. The report also projects that the now $50 billion cumulative budget shortfall for state governments will double to $100 billion by July 2003.
The report's recommendation for increased, rather than less aid to states to balance budgets and continue providing basic services is in line with one of the recommendations made to state governments by AFSCME President Gerald W. McEntee yesterday before a crowd of state and local labor activists on hand for AFSCME's Budget Crisis Strategies Conference. The other three AFSCME proposals announced by President McEntee included suspending scheduled tax cuts, pooling purchasing power to reduce health care costs, and tapping "rainy day" funds.
"Working families across the country are already getting battered. Now some of their elected leaders want to cut drastically the services they depend on and lay off the hard-working employees who deliver them. It's up to us to show these officials that there are smarter and fairer ways to close budget gaps," President McEntee said.
In addition to the reductions in federal aid proposed by the Bush administration, state governments would have to deal with extra losses in revenues caused by the additional business tax cuts and $9 billion decrease in Medicaid reimbursements under the Bush budget plan.
- Text of Budgeting Beyond the Beltway: How the Federal Budget Imperils State and Local Finances (PDF)
