Budget battles keep states from tackling reforms

MADISON, Wis. — As lawmakers in cash-strapped states wrestled this year with revenues that kept on falling, both campaign promises and long-standing reform efforts got pushed to the side. There just wasn’t enough time or money to expand health care or improve education — or, in Rhode Island, finally get around to banning indoor prostitution — while also passing a budget.

In California, where lawmakers failed last week to solve the state’s whopping $24.3 billion deficit by the start of the new fiscal year, they can’t legally do anything else. Gov. Arnold Schwarzenegger had declared a fiscal state of emergency that prevents the Legislature from taking action on anything but the budget until the state’s fiscal crisis is resolved.

Unlike their colleagues in Washington, where policy work isn’t hindered by the need to pay as you go, state lawmakers generally can’t leave for home without settling on a spending plan. This year, the trials of passing a budget kept lawmakers nationwide from work on health care, transportation, unemployment insurance trust funds and pension funds, said Sujit CanagaRetna, a senior fiscal analyst at the Council of State Governments in Atlanta.

“The sea of red ink we’re swimming in now has completely displaced these other fundamental issues,” CanagaRetna said. “The can’s been kicked down the road and those issues are going to have to be dealt with.”

Ohio Gov. Ted Strickland’s plans for an overhaul of the state’s public education system — a key campaign promise — remains in limbo as lawmakers argue over a proposal to allow casino-style gambling to raise money and the state gets by on a one-week temporary budget. The state Supreme Court has ruled repeatedly that the existing school-funding system is unconstitutional, in part for an over-reliance on property taxes.

Strickland isn’t alone. Missouri’s Republican-led Legislature, citing tight finances, refused to act on two of new Democratic Gov. Jay Nixon’s main campaign pledges — to restore Medicaid coverage for low-income parents and to expand a community college scholarship program.

In Maryland, Gov. Martin O’Malley made campaign promises to do all he could to lower electricity rates. But the bill died in a House committee where members said they did not get enough time to review the complicated legislation in a session dominated by budget problems.

And in the frenzied rush after Rhode Island’s budget passed late last month, state lawmakers were unable to agree on a compromise to close a 30-year-old legal loophole that permits prostitution so long as it happens indoors. For years, judges have dismissed prostitution charges against sex workers and their bosses in the so-called spas and “massage parlors” that proliferate across the state.

It won’t be any easier tackling such unresolved issues in the years to come as budget problems are expected to continue into 2011, CanagaRetna said.

“It’s going to involve some fundamental reforms in how state government operates,” he said. “Not only a time commitment, but energy and resources from both sides of the aisle and the executive branch. Right now people are just swimming in one place trying to stay afloat.”

Education reform efforts died in several states. In New Mexico, a proposed overhaul that came with a $400 million price tag failed. Minnesota Democrats had hoped to revamp school funding with a $1 billion-plus plan to increase state spending on schools and cut property taxes. That was left undone, as were Republican Gov. Tim Pawlenty’s proposals to spend more on schools through pay-for-performance programs.

There were plenty of other reform efforts that fell victim to the simple economics of dwindling state incomes. Indiana’s Gov. Mitch Daniels’ plans to expand two maximum security prisons to meet a growing demand for bed space and expand full-day kindergarten to more schools were lost during that state’s special session budget negotiations.

Kansas’ budget problems prevented the state from keeping a promise to its schools to continue increasing their aid, a commitment it made to end a successful education funding lawsuit in 2006. The state had pledged to increase that aid by some $165 million for the 2009-10 school year, but that has now been cut by about $163 million, or $215 per pupil. That’s inspired talk of more litigation.

In Wisconsin, Democratic Gov. Jim Doyle had to give up one of his signature programs: $30 million in grants benefiting businesses researching and developing clean energy. He also delayed the start of tax breaks to help parents with child care expenses.

“This is one of the hard choices that have to be made during tough economic times,” Doyle’s spokeswoman Carla Vigue of eliminating the renewable energy program. “The Legislature and the governor have to make hard cuts, including cuts to programs that the governor cares deeply about.”

Associated Press writers Martiga Lohn in St. Paul, Minn., David Lieb in Jefferson City, Mo., Ray Henry in Providence, R.I., Tim Talley in Oklahoma City, John Hanna in Topeka, Kan., Brian Witte in Annapolis, Md., Mike Smith in Indianapolis, Barry Massey in Santa Fe, N.M., and Julie Carr Smyth in Columbus, Ohio contributed to this report.