State budget cuts hurt the most vulnerable

Facing massive deficits, at least 40 states, including 10 Southern states, are proposing or already reducing services to their residents, including some of their most vulnerable families and individuals, according to a new study from the Center on Budget and Policy Priorities. The study explains that these budget cuts are worsening the recession because they are reducing overall economic activity and taking money out of local economies.  

From the CBPP study:

When states cut spending, they lay off employees, cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals. All of these steps remove demand from the economy, which only worsens a downturn. Tax increases also remove demand from the economy by reducing the amount of money people have to spend.

Some key findings in the report:

• At least 28 states have proposed or implemented cuts that will affect low-income children's or families' eligibility for health insurance or reduce their access to health care services.  For example, South Carolina is limiting coverage for many services, such as psychological counseling, physician visits, and routine physicals.
• At least 22 states plus the District of Columbia are cutting, or proposing cuts to, medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or significantly increasing the cost of these services.  For example, Florida has frozen reimbursements to nursing homes and relaxed staffing standards.
• At least 26 states are cutting, or proposing cuts to, K-12 and early education.  Already, Florida, Maine and South Carolina have each cut school aid by an estimated $95 or more per pupil.
• At least 32 states have implemented or proposed cuts to public colleges and universities.  The result is cuts in faculty and staff and tuition increases of 4 percent to 15 percent.
• At least 38 states and the District of Columbia have made, or have proposed making cuts affecting their state workforces.
• At least 24 states and the District of Columbia have instituted hiring freezes, ten have announced or proposed lay-offs, eleven have reduced or proposed reducing state worker wages, and several have delayed scheduled pay increases (including cost of living adjustments).
• Governors in a growing number of states have ordered or requested that state agencies reduce spending across the board in the current fiscal year:  Alabama (10 percent), Florida (4 percent), Hawaii (2 percent), Idaho (4 percent to 6 percent), Iowa (1.5 percent), Kansas (2 percent), Mississippi (2 percent), Indiana (10 percent) New Mexico (5 percent) North Carolina (3 percent to 7 percent), Ohio (5.75 percent), Oregon (1.2 to 5 percent), Pennsylvania (4.25 percent), and South Carolina (7 percent).
  

Some further examples of enacted or proposed cuts in Southern states:

• In South Carolina families moving from welfare to work will now receive one year rather than two years of Medicaid coverage. An estimated 3,700 elderly and disabled people are expected to lose Medicaid benefits because of tighter income requirements. The state also has imposed new restrictions on many services, including preventive services.
• In Tennessee, an estimated 30,000 to 40,000 seriously ill people are expected to lose hospitalization and other needed medical services provided through TennCare.
• In Alabama, the Department of Human Resources has ended home-makers services for approximately 1,100 older adults. These services often allow people to stay in their own homes and avoid nursing home care.
• In Georgia, services for the elderly, such as Alzheimer services, elder service centers, prescription drug assistance, and elder support services, have been reduced.
• Louisiana will begin instituting a limit on the number of prescriptions it will pay for. This may affect access to prescription drugs for mentally ill or disabled individuals who rely on several medications to manage their conditions.
• Virginia has decreased facility reimbursements for special hospitals serving people with needs relating to mental health, mental retardation, or substance abuse. Additionally, pass-through grants for various aging programs have been reduced. Funding for local mental health providers was also cut.
• Florida has cut aid to local school districts for the current year by $140 per pupil. South Carolina has cut per-pupil funding by $95 in the current year.Georgia has cut aid to local school districts and the state's governor has proposed additional cuts. Under the governor's proposal per pupil cuts would amount to $115 per pupil for the current fiscal year, and $189 per pupil for the coming fiscal year.
• In Kentucky, state budget cuts to colleges and universities of about 3 percent led to in-state tuition hikes of 5.2 percent at the Kentucky Community and Technical College System. The Council on Postsecondary Education has also approved in-state tuition increases for universities  across the state from 6.1 percent (Murray State University) to 9 percent (University of Kentucky and University of Louisville). Additionally, the University of Kentucky has announced 188 faculty and staff positions would be eliminated.