Eight States Slashing Local Funding

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4) Minnesota
> Pct. decline in local funding: 8.2%
> Actual decline local funding: $928 million (5th largest)
> State budget shortfall (2010): 22.7% (21st smallest)
> Pct. change in gov’t workers per capita: -3.8% (24th smallest decline)

According to the Minnesota Budget Project, the inability of the state to pay down its deficit in the 2010 – 2011 biennium was caused by a heavy reliance on one-time measures that failed to correct or reduce long-run deficits. In 2011, the League of Minnesota Cities sued the state’s legislature and governor in order to continue receiving aid after a government shutdown that July. The cities eventually agreed to accept a $138 million dollar cut in the funds to be received — a reduction of about 19%.

3) Virginia
> Pct. decline in local funding: 8.5%
> Actual decline local funding: $1 billion (4th largest)
> State budget shortfall (2010): 24.1% (20th largest)
> Pct. change in gov’t workers per capita: -4.7% (tied at 22nd largest decline)

In February 2010, Virginia Governor Bob McDonnell proposed a total of $2.3 billion in cuts in order to balance the state budget without any increase in taxes. As a result of these cuts, the state of Virginia reduced transfers to its localities by more than $1 billion. The city of Roanoke, which was forced to raise taxes after the state’s budget was passed, responded to these cuts with particular frustration. Local officials in Roanoke denounced the state initiatives as indirect taxation, because they required municipalities to raise taxes to cover those funding cuts.

2) Wyoming
> Pct. decline in local funding: 9.5%
> Actual decline local funding: $185 million (19th largest)
> State budget shortfall (2010): 1.8% (the smallest)
> Pct. change in gov’t workers per capita: +2.5% (2nd largest increase)

Between 2009 and 2010, Wyoming’s local governments’ revenue suffered from what Pew calls a “one-two punch”: shrinking in both state aid and property taxes. According to Census State Government Finance data, state aid fell by $185 million, while tax revenues declined by 21.9% — the highest proportional decline in the country. Belt-tightening measures were necessary for the state to avoid layoffs of government officials. According to the Billings Gazette, officials at the Natrona County Detention Center were told that if they did not comply with budget cuts as high as 27%, they would be forced to lay off almost a third of their staff.

1) New Mexico
> Pct. decline in local funding: 10.4%
> Actual decline local funding: $498 million (9th largest)
> State budget shortfall (2010): 18.2% (11th smallest)
> Pct. change in gov’t workers per capita: -5.4% (16th largest decline)

Out of all states, New Mexico cut funding to its localities the most, reducing spending by more that 10% between 2009 and 2010. According to the Center on Budget and Policy Priorities, additional state cuts also resulted in fewer funds for higher education, the state workforce and services for the elderly and the disabled. The Santa Fe New Mexican writes that the Santa Fe School District endured the worst of its fiscal cuts in the 2009 – 2010 school year, when they were underfunded by about $11 million. After three consecutive years of deep budget cuts, New Mexico is now projecting a budget surplus of $250 million in 2012. NPR reports that the New Mexican government is now debating whether to restore some services.

-By Michael B. Sauter, Ashley C. Allen, Alexander E.M. Hess and Lisa A. Nelson