2011 Worst State Budgets

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American economy has gone through economic crisis that took a toll in some states. As crisis unfolded some states had to consider taking drastic measures in order to balance the state budget through best practices. The 2011 report issued by the National Conference of State Legislatures (NCSL) presented a clear picture of budget gaps. To succeed with closing the budget gaps most states were forced to spend less, increase taxes, seek help from the federal government and to sell bonds.

Those states that failed in best practices to close this gap came out as the worst state budgets. Five of the worst state budgets in 2011 include:

1. Governor Mark Dayton (Minnesota): His government failed to conclude the plans to tackle the $5 billion budget deficit. As a result, road constructions, state parks, rest shops on the highway, and zoo management had come to a halt. Moreover, social services and other state funded facilities like women’s shelters, and drug treatment centers are struggling to remain open. These failures in implementing best practices have delayed tax increases and cutbacks on spending. Rumors are that the legislature and Dayton are still $1.4 billion apart from one another on the agreement. There is still no visible closing to bridge the budget deficit.

2. Governor Dan Malloy (Connecticut): Governor Malloy along with the State Employee Unions could not come to a reasonable agreement. Public employee unions rejected the proposal implementing a wage freeze for two years. This proposal could have avoided employee layoffs, which could have served for best practices. At the end, both parties were disappointed. Malloy had announced his plan to lay off 5,500 workers and reduce state funding by 2% to ensure that municipalities succeed in closing a $1.6 billion gap. Instead, lawmakers didn’t only reject Malloy’s plan. They also forced the government to lay off 1000 more state employees.

3. Governor Nikki Haley (South Carolina): Only eight out of 35 Haley’s budget vetoes were left standing after South Carolina’s Republican-controlled legislature dominated them. This came as a huge blow to Haley’s attempts to close the budget deficit for best practices. At the end, only $508,000 out of Haley’s proposed $212 million spending cuts were approved. Lawmakers rejected her cuts to spend less on public schools, economic development, job training, and state Arts Commission and conservation programs.

4. Vendors (Illinois State): 2011 ended with $8.3 billion unpaid bills. Almost half of this money is owed to state vendors, such as healthcare providers and food distributers. Moreover, corporate tax refunding of $850 million, interfund borrowing of about $750 million and employee health insurance for $1.2 billion were also included in the Reuter report. If the bill had passed, Illinois would have used $6.2 billion bonds to pay off with best practices. Now the budget deficit will get worse than before.

5. Governor Rick Scott: (Florida): Even though Scott successfully cut state spending by $4 billion, his measures made him less popular among voters. This was because his $69.7 billion tax increased along with the state spending cuts for best practices. He also cut spending on K-12 education by $1.35 billion and on Medicaid by $1 billion. The consequence of this budget was that 4,500 positions in the state government were eliminated. More than 6 Florida voters, out of 10 disapprove Scott’s job performance and his use of best practices.

The consequence of failed best practices is that the budget deficit is still high in these states.

Further reading: Corporate Governance | Audit | Performance Improvement

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