States in 3rd Year of Unprecedented, Continuing Fiscal Crisis; AFT Report: Cuts in Education, Healthcare Will Have Long-Term Effect

2/12/2004

From: Janet Bass of the American Federation of Teachers, 202-879-4554, e-mail: jbass@aft.org

WASHINGTON, Feb. 12 -- State governments are facing the third year of a fiscal crisis worse than anything experienced since the Great Depression, brought on mostly by irresponsible Bush administration economic policies that are having devastating and lasting effects, according to an American Federation of Teachers report released today.

Another Long Winter: The State Fiscal Crisis in Its Third Year details long-term damage to education, healthcare and public services due to states' continuing budget deficits. The national report includes case studies of three states -- Washington, Wisconsin and New York -- explaining how federal tax cuts and reduced revenue have devastated essential programs, services and jobs. The fiscal problems in these states represent a microcosm of what is happening nationally, AFT Research Director Jewell Gould said. The report notes that President Bush's recently proposed 2005 budget will not alleviate the problem; in fact, the administration's fiscal policies that include permanent tax cuts will aggravate it.

"While some states have done marginally better recently, the majority face a bleak future because many of the losses are permanent," AFT President Sandra Feldman said. "The only way to reverse the serious damage inflicted on education, healthcare and public services is to halt harmful and reckless tax cuts and other misguided federal policies."

According to Another Long Winter, the effect on states of the $200 billion cumulative three-year budget shortfall is serious and pervasive. "Most of the responsibility for this problem can be placed squarely at the feet of the Bush administration," the report says. The massive deficits to fund tax breaks for the wealthy "rob states of hope that the federal government will be able to play a constructive role in the future. The nation's current course bodes ill for state and local governments."

Among the examples the report cites of the devastating consequences of states' fiscal crises:

For preK-12th grade education: Reduced federal, state and local contributions have left states and school districts without the dollars necessary to meet higher standards and help students at risk of failing. The No Child Left Behind law, in particular, does not back up its standards and accountability requirements with the promised federal dollars needed to meet those standards. Also, summer school programs for struggling students have been cut in school districts in 22 states.

In Colorado, 1,900 fewer students will attend prekindergarten as a result of the cuts. In Florida, high school graduation requirements have been reduced. In Georgia, the state's reading program and class size reduction for grades 4-12 have been suspended. In Massachusetts, class size reduction has been eliminated, and funding has been cut for school breakfast programs, early childhood education, and remediation for students struggling to pass the high school exit exam. In Minnesota, funding has been cut for early childhood family education, school readiness, Head Start, special education, and the school breakfast program. And in Washington, class size reduction programs have been cut.

For higher education: State support for public universities and colleges has been slashed. This has undermined the quality of services provided to students, caused faculty layoffs and greater reliance on lower-paid part-time faculty. It also has created skyrocketing tuition hikes that make a college degree an increasingly unattainable goal for many.

For example, Illinois community colleges have laid off faculty and staff and scaled back course offerings. Massachusetts colleges report larger class sizes because of layoffs. The University of Arizona raised tuition by 40 percent. The State University of New York raised tuition for the first time since 1995. Washington State's 2003-05 budget includes a $131 million reduction for higher education and a 7 percent tuition increase. In Wisconsin, the biggest cut in the budget was for higher education - a $250 million reduction, with about $150 million to be made up by tuition hikes.

For healthcare: The most common strategy used by states to reduce Medicaid costs in fiscal years 2003 and 2004 was to cut or freeze payment rates for hospitals, doctors and nursing homes, which will further limit access to healthcare for low-income Americans. The Children's Health Insurance Programs (CHIP) have been cut, with some states either freezing enrollment and turning away children who meet state guidelines or raising the eligibility requirements. Also, public employees' health benefits have been cut -- benefits that often had been provided to offset modest or no salary increases.

For public services: At least 175,000 public sector jobs have been eliminated since February 2003, according to the Labor Research Association, a cut necessitated by diminished state and federal aid. A shrinking public sector workforce means shrinking services.

For example, Alabama Gov. Bob Riley proposed cutting hundreds of prosecutorial staff, which will delay murder trials by 18 months. Pittsburgh has laid off 103 police officers, forcing the city to disband its SWAT and mounted units. In New York State, programs to help welfare recipients enter the labor force suffered significant cuts. And in Wisconsin, more than 2,000 state jobs are scheduled to be eliminated in the 2003-05 budget. The cuts will be the most severe in such agencies as Agriculture, Trade and Consumer Protection; Corrections; Health and Family Services; Natural Resources; and Workforce Development.

"Much remains to be done to repair the damage inflicted on states and local government. It will be another long winter," the report concludes.

Another Long Winter is available at: http://www.aft.org/reports/download/AnotherLongWinter.pdf

The AFT represents 1.3 million pre-K through 12th-grade teachers, paraprofessionals and other school-related personnel; higher education faculty and academic staff; nurses, healthcare workers; and federal, state and local government employees.