> 2011 budget shortfall as a % of general fund: 34.7%
> 2011 budget shortfall: $940 million
> 2012 projected budget shortfall: 13.8% (16th largest)
> GDP change (2006 – 2010): +8.3% (tied for 14th smallest increase)
> Median home value change (2006 – 2010): +5% (22th largest increase)
Maine is another state that conflicts with the assumption that states with severe budget shortfalls were the only ones hit hard by the recession. Median home value actually increased 5% in the state, and the poverty rate dropped the third-most in the country. Nevertheless, Maine faced a $940 million budget shortfall in 2011, worth 34.7% of available funds for that year. In 2011, the state made cuts in every major funding category and to CHIP and Medicaid. It has also instituted hiring freezes for state employees. For the 2012 fiscal year, Maine is again projected to have a budget shortfall, this time of $422 million. In light of this, the state cut temporary cash assistance and food stamps to legal immigrants who have been in the country less than five years.
4. New Jersey
> 2011 budget shortfall as a % of general fund: 38.2%
> 2011 budget shortfall: $10.7 billion
> 2012 projected budget shortfall: 36.0% (2nd largest)
> GDP change (2006 – 2010): +7.1% (10th smallest increase)
> Median home value change (2006 – 2010): -7.5% (9th largest decline)
Home values in New Jersey dropped 7.5% between 2006 and 2010, the ninth largest decline. For the third year in a row, the state has initiated deep cuts to close its budget gap. The state made the eligibility requirements for its public health insurance program more strict. As a result, approximately 50,700 low-income adults will lose access to health care coverage, according to CBPP. The state cut funding to after-school programs, which will affect 11,000 students and cause 1,100 staff workers to lose their jobs. That is on top of already cutting 2,000 state positions. Despite all of these changes, the state’s projected budget shortfall for 2012 is only 2.2 percentage points lower than this year’s and the second-largest among the states.
> 2011 budget shortfall as a % of general fund: 39.0%
> 2011 budget shortfall: $3.3 billion
> 2012 projected budget shortfall: 17.0% (10th largest)
> GDP change (2006 – 2010): +2.7% (4th smallest increase)
> Median home value change (2006 – 2010): -28.6% (4th largest decline)
Like its neighbor Nevada, Arizona was hit particularly hard by the subprime mortgage crisis. Between 2006 and 2010, median home values plunged 28.6% in the state, the fourth worst price drop in the country. GDP, poverty and income levels have either stagnated or become significantly worse during this period. Since 2009, the state has had among the worst budget gaps in the country, a combined total of $12.1 billion for the three years. To balance its budget, Arizona has made dramatic budget cuts, including revoking Medicaid eligibility of more than 1 million low-income residents and cutting preschool for more than 4,000 children.
> 2011 budget shortfall as a % of general fund: 40.2%
> 2011 budget shortfall: $13.5 billion
> 2012 projected budget shortfall: 16.0% (11th largest)
> GDP change (2006 – 2010): +8.2% (13th smallest increase)
> Median home value change (2006 – 2010): -4.2% (11th largest decline)
Illinois has consistently had among the largest budget shortfalls in the country since 2009. It also was hit extremely hard by the recession. Between 2006 and 2010, home values decreased by 4.2%. GDP grew a relatively small 8.2%. Median household income increased less than 2%. The state made cuts in its budget for community mental health services for both children and adults, and it cut its school education funding by 4%, or $311 million. Governor Pat Quinn has announced also that he will lay off thousands of state employees.
> 2011 budget shortfall as a % of general fund: 54.5%
> 2011 budget shortfall: $1.8 billion
> 2012 projected budget shortfall: 37.4% (the largest)
> GDP change (2006 – 2010): +1.2% (smallest increase)
> Median home value change (2006 – 2010): -44.5% (the largest decline)
No state has suffered during the recession more than the state of Nevada. Between 2006 and 2010, home values plummeted a staggering 44.5%, the poverty rate increased 26%, median income dropped 3.8% and GDP increased only 1.2%. Each was the worst in the country for that category. Last year, Nevada’s budget gap was $1.8 billion, the equivalent of 54.5% of available funds. This was the third year in a row the state has had one of the worst shortfalls in the country, and that trend appears ready to continue through at least 2013. In order to balance its budget last year, Nevada was forced to raise taxes significantly, cut dental and vision services from Medicaid coverage for adults and reduce financial aid funding and state employee salaries.
-Michael B. Sauter, Charles B. Stockdale, Ashley C. Allen