REPORT #596 January 2003

Produced by the Belize Development Trust

E-mails from the Belize Culture debating listserve

UNDER THE WTP Independents, BELIZE must balance the budget! This means a very big debate.


DEBATE ISSUES OF THE WTP?????? A new group of independent political candidates!

a) Mandatory total borrowing limits. Maximum 9 % of GDP ceiling and freezing of borrowing until debt falls below 4% of GDP.

b) Limiting the payroll of Government by law to: 8.9% of GDP. Otherwise freeze hirings until number goes below 5% of GDP. This will force innovative new inventive methods of supplying government services and massive reorganization to operate within the budget. Again, will cause a big debate.

c) Shift the balance of power for policy making from a political party clique of the port town Belize City, to thelegislature and Senate. By getting national consensus by changing population representationto District Representation, with perhaps one extra representative for towns over 50,000population. But elect by District, not population? We want to build a nation, not ametropolis. These things could be reviewed and voted on every ten years, like they are inFlorida.


On Tue, 28 Jan 2003 05:44:30 -0800 (PST), Terry Warburton wrote: This message sent to the Bz-Culture Mailing List from Terry Warburton

It is a real eye opener to read the following story. It makes the Belize government look good by comparison. You can bet that almost every state will prefer tax increases to any kind of cutting of expenses.

As Ray pointed out, the individual states MUST balance their budgets. Either cut or raise taxes.

Nothing is free.....


State by State Glance at Budget Woes

Monday January 27, 2003 8:10 PM

A glance at the budget situation in each state:

    It's probably the worst fiscal crisis the state has seen since the Great Depression, said David Azbell, spokesman for Gov. Bob Riley. Officials predict they will have to take as much as $200 million from a $248 million state reserve fund to prevent education cuts.
    Heavily dependent on declining oil revenues, state has also been hit by rising Medicaid costs. The state has been draining its $2 billion savings account, but the governor has ruled out new taxes.
    Individual income tax revenues are sagging, while education and health care costs are rising. More than 1,500 state jobs are being eliminated. Faces a projected shortfall of $1 billion in the budget for the 2003-2004 fiscal year.
    With declining revenues and rising expenses, Republican Gov. Mike Huckabee and legislators say nothing is off-limits, including cuts in social services. Huckabee has proposed a 5/8-cent sales tax increase to raise $475 million to preserve current state programs.
    Suffered its worst revenue declines in the past two years since World War II. State relies heavily on income taxes and taxes on capital gains and stock options from the wealthiest 10 percent of its residents. State faces an 18-month deficit of almost $35 billion.
    Facing its worst budget crisis in a decade. State is closing 25 state driver's license offices and plans to lay off about 180 employees. Lawmakers working to find as much as $850 million in cuts for the fiscal year ending in June.
    State income tax revenues have plummeted, largely because of the slumping stock market. Lawmakers considering tax hikes and more layoffs. Facing an estimated $650 million deficit in the current fiscal year. Projected shortfall for next year: $1.5 billion.
    While revenue estimates for fiscal 2004 are off by $135 million from the original June estimate, state officials are actually trying to close a shortfall of around $300 million, a number they say reflects a "structural problem" in the budget. Gov. Ruth Ann Minner says no state agency or program is off-limits for cuts.
    Gov. Jeb Bush believes Florida can increase spending on schools and some social services and give shoppers a sales tax "holiday" on clothing and books in his $54 billion budget plan. But he proposed cuts or limits to many programs, including transportation, services for troubled and criminal teens, and hospital stays for some uninsured sick people with catastrophic illnesses. He blames the cuts on voter-mandated class-size reductions that he opposed.
    State tax collections continue to fall. Shortfall projected at $620 million for the year ending June 30. State portion of Medicaid costs expected to increase by $260 million in the current budget year and $276 million in the year beginning July 1. Gov. Sonny Perdue proposes spending cuts and new taxes on tobacco and liquor. A state tax relief program for homeowners would be cut back.
    State's vital tourist industry is slowly recovering from the Sept. 11, 2001, terrorist attacks and a continuing slump in the Japanese economy. Shortfall estimated between $200 million and $250 million.
    Worst economic downturn in decades. Gov. Dirk Kempthorne proposed $270 million in tax hikes and says there can be no further cuts in education, Medicaid and public safety. Current budget year deficit was $200 million but is being covered by a $22 million spending cut and cash from all the remaining state reserves including the trust fund set up for tobacco settlement payments.
    Leaders have mixed relatively small tax increases with short-term cuts and layoffs. They closed an adult prison, a juvenile prison and some work camps. They shut or cut back state facilities for the mentally ill. Gov. Rod Blagojevich predicts a $1.2 billion shortfall in the remainder of this fiscal year and $3.6 billion in fiscal 2004.
  • INDIANA House Speaker B. Patrick Bauer compared the crisis to that of the 1840s, when the state went into massive debt building canals that were never completed and were soon rendered obsolete by the railroad. Indiana faces a $850 million budget deficit and has lost 120,000 jobs to the recession.
  • IOWA
    "I've lived in Iowa for 27 years and we have not faced the kind of fiscal challenges we have faced this last year in that 27-year period," said Gov. Tom Vilsack. Next year's budget could be $400 million short.
    Gov. Kathleen Sebelius proposed eliminating most aid to local governments and spending all but $500,000 of the state's cash balances to help eliminate a projected $750 million shortfall for next year. She also proposed shifting money from highway projects to help prevent cuts in education spending. She is not seeking any tax increases.
    In the previous two years, the state drained its reserve fund of nearly $300 million and borrowed or grabbed money from the dozens of little accounts that are strewn across government. State expects about a $400 million shortfall in fiscal 2004.
    Problems stem from lower-than-projected sales, corporate income and riverboat gambling taxes, but a continued spike in petroleum prices is helping save Louisiana from a budget crisis. Shortfall projected at about $18.6 million over the next six months.
    Some savings have been derived from hiring freezes, but there have been no actual layoffs. Projected gap for the two-year budget cycle that will begin on July 1, 2003, at around $1 billion.
    State has imposed a hiring freeze but so far has avoided layoffs. The projected shortfall for fiscal 2004 is $1.2 billion. Gov. Robert Ehrlich wants to put slot machines at race tracks and is counting on $395 million this year and $600 million next year in slot machine revenues to balance both budgets. It is uncertain whether a bill will pass.
    House Speaker Thomas Finneran calls the budget crisis "hideous" and Gov. Mitt Romney's budget chief calls it the state's worst financial predicament since the Depression. State has an estimated $450 million to $600 million budget gap in its $23 billion 2002-2003 budget. Romney predicts a deficit of nearly $3 billion in 2003-2004. A $1 billion tax increase last year failed to offset rising Medicaid costs.
    Gov. Jennifer Granholm notified schools they could be seeing cuts this semester to deal with a $134 million deficit in the state School Aid Fund. The general fund now faces a $158 million shortfall. The state faces an overall $2 billion deficit in its upcoming fiscal year, which starts Oct. 1, 2003.
    Nearly every area of state government will be looked at for cuts. Gov. Tim Pawlenty has promised not to raise taxes. The state faces a deficit of $4.56 billion through 2005, including $356 million through June 30, the end of Minnesota's fiscal year.
    Legislators proposed a $3.5 billion state budget for fiscal 2004 with no increases in agency funding over present levels. Lawmakers fear shortfalls could run into the hundreds of millions of dollars. There is no mood for a tax increase.
    Net general revenues declined in the 2002 fiscal year for the first time since 1955 and have continued dropping during the 2003 fiscal year, which started July 1. Budget Director Linda Luebbering forecasts a $1 billion deficit in the 2004 budget.
    State faces a projected general fund deficit of $232 million, out of a total budget of $2.6 billion for the next two fiscal years. The problem is caused by lower-than-expected state revenues, particularly in capital gains and individual income taxes.
    Lawmakers raised cigarette taxes 30 cents a pack, approved a temporary income-tax increase, lifted sales tax exemptions from some goods and services, made cuts to Medicaid and the University of Nebraska system, and raised the sales tax half a cent to 5.5 cents on the dollar. They begin crafting a two-year state budget facing a projected $673 million shortfall.
    Gov. Kenny Guinn called for nearly $1 billion in new taxes, saying it would be "political cowardice" for lawmakers to oppose the biggest tax hike in Nevada history. The tax plan covers what would be a $700 million-plus shortfall and allows for expansion of some services, mainly in education and human services programs.
    The projected $250 million deficit through mid-2005 is the equivalent of about 10 percent of general tax receipts for this budget.
    Early estimates project a $4 billion shortfall for the budget that begins July 1. Gov. James E. McGreevey announced last week there will be severe cuts across state government but has not yet given details.
    Fueled by a boom in natural gas, New Mexico is expecting recurring revenue to grow 3.7 percent in the budget year that begins next July 1.
    Facing its worst budget problem since the mid-1970s, when the state had to step in to prevent New York City from going bankrupt. State faces a projected $12 billion shortfall.
    Tax collections are on target and no shortfall is expected. The current budget led to the elimination of 1,835 jobs, with 782 layoffs in filled positions. More layoffs are likely, with teaching assistants in the elementary schools among possible targets.
    Gov. John Hoeven ordered a 1 percent spending reduction and tapped the state-owned Bank of North Dakota for $25 million to close a deficit. To balance the next budget, Hoeven wants to exhaust $52 million from state oil tax and health care trust funds, and raise the cigarette tax from 44 cents to 79 cents a pack.
  • OHIO
    State had to balance the budget twice last year after billion-dollar deficits opened up and is facing a third, $720 million deficit. The governor and state leaders expect this budget to be tight, with some estimates of the deficit at $4 billion. Education will once again receive a big increase because of a 12-year-old school-funding court case.
    Facing the worst budget crisis in its 95-year history. State agency budgets have been reduced 6.5 percent this year because of a $291.7 shortfall. State lawmakers will have $592 million, or 10.6 percent, less to spend in the 2004 fiscal year than in the year before.
    Budget analysts predict revenue will be as much as $2 billion short of funding state programs at current levels, accounting for inflation, in the 2003-05 budget. School funding has been cut by 2.5 percent, compared with an average state budget reduction of 5 percent. Oregon's budget troubles will be even worse if voters reject a temporary tax hike - proposed to help plug holes in the current state budget - in a referendum Tuesday.
    State is adopting a package of budget freezes, another raid of its rainy-day fund and other maneuvers to ward off a projected $433 million deficit by June 30. Gov. Ed Rendell predicts a shortfall between $1 billion and $2 billion in next year's budget.
    Lawmakers signaled that no area of the budget is off limits by eliminating $100 annual payments to welfare recipients. State faces a potential deficit of about $175 million next fiscal year.
    Current projections call for a gap of up to $1 billion in projected spending and revenue for the 2004 fiscal year, out of a $5.4 billion budget.
    Has so far been able to weather the economic slump by tapping reserve funds, but it will look at also boosting cigarette and alcohol taxes. Based on the latest revenue projections, the state would need another $54 million to maintain programs at their current levels in the year beginning next July 1.
    Last year, lawmakers passed a $933 million tax increase based primarily on a 1-cent increase in the sales tax (from 6 percent to 7 percent) plus a hodgepodge of other increases. More than half the money - about $480 million - went to fill the shortfall created by the previous years of budget maneuvers. State faces a $322 million deficit this budget year and roughly $500 million next year.
    Current fiscal year ends Aug. 31 and a shortfall of $1.8 billion is projected. For the next fiscal year, beginning Sept. 1 and running through Aug. 31, 2005, the projected shortfall is $8.1 billion. That budget is yet to be written by lawmakers meeting now. The combined shortfall is $9.9 billion.
  • UTAH
    Gov. Mike Leavitt warns that budget problems could force the state to release prisoners early and lay off state troopers. On Dec. 18 the Legislature made budget cuts to make up for an anticipated $117 million shortfall this fiscal year.
    A combination of a cigarette tax increase and budget cuts approved last year will keep Vermont's general fund in the black this fiscal year, but more cuts will be needed to avoid a deficit in the budget year that starts July 1.
    Governor and legislators have struggled to close shortfalls totaling nearly $6 billion. Buffeted by the stock collapse and layoffs at WorldCom, which has huge operations in northern Virginia, state government revenues for the fiscal year that ended June 30 were down 3.8 percent, the sharpest decline in the 40 years Virginia has tracked revenue collection data.
    Projected shortfall is $2.4 billion out of a $24 billion two-year budget. Gov. Gary Locke calls it the gravest budget problem in a generation.
    To avoid a $250 million deficit in the budget year that starts July 1, Gov. Bob Wise ordered spending cuts and wants to revamp his cabinet. His plan also counts on a cigarette tax hike from the Legislature.
    Projected a $2.6 billion shortfall in the budget for the biennium that begins July 1. Gov. Jim Doyle says that number is based on overly optimistic revenue estimates and the deficit is closer to $4.3 billion. He also says he will not cut K-12 education funding. But he has hinted that he would like to change the state's formula for funding schools.
    Due to a large upswing in natural gas production and generally higher prices for natural gas and oil in recent years, Wyoming is enjoying a boom. Sales tax collections, which provide the bulk of state government revenue, have also been higher than expected.
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