David's Blog

Even with the federal stimulus package dumping billions of dollars into the states, California, Kentucky, Nevada, New York and Washington are among states that struggled with the largest deficits in modern history. California, by far, faced the biggest challenge — a whopping $26 billion gap — that forced the state to slash $15 billion in basic services, including program funds for K-12 education and health care for the poor, and to divert some $4 billion from local jurisdictions.

Stateline.org’s 2009 Legislative Review isan exclusive look at major developments in state capitols as the country enters the second year of a national recession.

Click here for Stateline.org’s online package that includes state-by-state reviews detailing how states handled budget deficits and the federal stimulus package; the trends developing in key areas, such as education and health care; notable new legislation; and a chart of completedsessions and political control.

While most statehouses have shuttered their doors for the year, newly emerging budget shortfalls caused by less-than-anticipated revenues will force many legislatures to reconvene to balance their budgets as required by law. The question is just how big the new holes will be. At least half the states already are running in the red less than a month after their new budgets began July 1. Arizona, Connecticut and Pennsylvania could not agree on a 2010 budget plan by July 1 and are still working to complete them. Michigan, the only state that begins its fiscal year Oct. 1, also is trying to close a budget shortfall.

Some states enacted the largest tax increases in recent memory to balance their ledgers while others made deep cuts, slashing budgets for prisons, mental health and higher education. Many states found short-term patches to plug holes, laying the groundwork for even bigger problems in the coming year, particularly when the federal stimulus money starts drying up.

Several of the new state tax hikes, for example, are temporary, including higher sales taxes in California and Nevada and heftier personal income taxes in Hawaii, New York and New Jersey. Illinois turned to another short-term fix by borrowing $3.5 billion to pay its pension obligation. Minnesota put off payments to school districts. California raided $2 billion from local governments to balance its books.

The Stimulus and the
States
Follow how states are managing the stimulus money and which programs are receiving funding as part of the recovery effort using Stateline.org's stimulus special section.

• At least 18 raised personal income and/or state sales taxes, with seven states levying higher taxes on those in upper-income brackets;
• At least 18 will collect more revenue in cigarette and/or alcohol sales;
• Some 35 states cut higher education spending or increased tuition;
• At least 26 states slashed funding to prisons, including seven that reduced spending by more than 10 percent and another seven statesclosed prisons entirely;
• 17 forced state employees to take furloughs or unpaid leave, affecting more than 830,000 employees, and at least six offered state employees buyouts;
• At least four states are forcing Medicaid patients to pay more for their care, and at least eight states cut optional benefits under Medicaid, the joint federal-state program that provides health coverage to more than 60 million low-income people;
• Seven sought new gambling revenue, including Delaware, which this fall will join Nevadaas the only states to allow sports betting. Ohio approved some 17,500 slot machines at race tracks, and Illinois added video poker at bars.

States are trying to balance their budgets at a time when state and local sales tax collections experienced their worst decline in 50 years and demands for state services are up dramatically as laid-off workers and struggling families seek unemployment benefits, food stamps and health care.

Budget deficit estimates change constantly and vary depending on the organizations tracking them. The National Conference of State Legislatures figures states had to confront deficits of $142.6 billion when they were drafting fiscal 2010 budgets, but at the same time, lawmakers had to erase $72.9 billion in red ink in their 2009 budgets. At least $60 billion of deficits are looming in 2011, but that number will likely grow.

The fiscal outlook is so bad for most states that even Republican governors, loath to raise taxes, bucked the tide of their national party and accepted — and sometimes suggested — tax increases. Mississippi Gov. Haley Barbour, a former national GOP chairman and tobacco lobbyist, agreed to a 50-cent tax increase on a pack of cigarettes, for the first hike in nearly 25 years, and a hospital tax.

Other Republican governors who had to accept tax increases include Arnold Schwarzenegger of California, M. Jodi Rell of Connecticut and Charlie Crist of Florida. One of the sticking points in the ongoing budget impasse in Arizona was Republican Gov. Jan Brewer’s insistence that the sales tax be raised, much to the dismay of the GOP-controlled Legislature.

The federal recovery money helped states avoid draconian cuts, but few programs were spared. California, Michigan and Utah ended adult dental coverage for low-income people. Virginia closed 18 highway rest stops, and Arizona closed six state parks two days a week. Colorado, Kansas, Michigan, New Jersey, New York, North Carolina and Washington shut down prisons. California's budget eliminates state funding for new textbooks for five years.

But at the same time, recession-weary lawmakers in 14 states managed to boost health care coverage for children, and at least nine states expanded programs for prekindergarten-age children.

Budget cuts felt widely

Americans, already distressed by rising unemployment rates and decimated savings investment plans, are feeling the impact of state budget actions far and wide.

Some 40,000 poor people were cut from Washington state’s basic health care plan, and another 29,500 poor adults lost coverage when Minnesota eliminated a program for individuals who don’t qualify for Medicaid. Fewer poor people in New York will be eligible for free cancer screenings because of budget cuts. And 30,000 legal immigrants will be cut from Massachusetts’ health care plan— despite the state’s ambitious goal of universal health care.

California, Connecticut, Georgia, Illinois, Michigan, New York, South Carolina and Tennessee were among states that made significant cuts to mental health programs.

Some 10,000 children in Illinois may not be able to go to preschool after the budget for prekindergarten programs was cut by 10 percent. California cuts may shorten its school year by five days. And in Hawaii, fewer students will be able to participate in school sports as athletic departments there got 65 percent of what they had in the last fiscal year. The $100 billion in the federal stimulus package for schools over the next two years helped many legislatures avoid severe education cuts, but shortfalls were too deep to avoid cuts for schools in California, Idaho, Illinois, Kansas, Nevada, Utah and Washington.

Drivers will pay more for gas in Oregon, Rhode Island and Vermont, and heftier vehicle registration or car rental fees are on tap in more than a dozen states. Cigarette smokers in a dozen states will see higher prices. New Jersey, New York and North Carolina increased both tobacco and alcohol taxes.

Businesses, travelers and motorists also will have to shell out more. Electricians, plumbers, funeral directors and Christmas-tree growers in Washington state will pay more for their licenses. Travelers to Hawaii, Indiana and Nevada will see higher hotel taxes. At least nine states hiked court fees to bring in more revenue. In Florida, for example it now costs $100 more for those seeking to adopt a child and $25 more for those caught driving 15 miles per hour over the speed limit. Massachusetts imposed a one-time satellite dish tax.

In Oregon, a voter-approved plan to impose longer prison sentences on those who commit property crimes was delayed by state lawmakers who said they could not pay for it. Tennessee’s department of corrections will save money by offering inmates less milk and meat in their daily meals. In Michigan, which has had the country’s highest unemployment since 2006, the budget picture is so bleak that the small town of Standish is hoping to import prisoners from California – or maybe Guantanamo Bay – to keep a local state prison in business.

States targeted online shopping as a source of tax revenue.New York was finally able to implement a law enacted last year that requires certain companies to collect sales taxes on goods bought over the Internet. (Amazon and Overstockchallenged the law in court and the case in on appeal). This year, North Carolina and Rhode Island passed similar measures.

Kentucky Vermont, Washington and Wisconsin all expanded the sales taxes to certain digital products, such as software and cell phone ring tones in Kentucky and online music in Washington. Tennessee extended the sales tax to software maintenance contracts.

State employees, once thought to have the most secure jobs with the best benefits, are being furloughed, or forced to take unpaid days off in at least 17 states. California’s furloughs are the nation’s harshest, with about 210,000 state workers losing three days each month until June 2010. Another 9,000 state employees in six states took early buyouts. Nearly 80,000 Pennsylvania state workers went unpaid for more than a month amid a state budget impasse.

The federal stimulus package blunted many cuts in health care programs because Congress threatened to withhold $87 billion in Medicaid money from states that had toughened eligibility standards and application processes they had on July 1, 2008. That meant some states like California and South Carolina had to roll back newer policies that cut people from their Medicaid programs.

A few states were able to cut, not raise, taxes. Maine, North Dakota and Vermont reduced income tax rates. North Dakota was so flush that lawmakers gave themselves and state employees a 5 percent pay raise and approved $400 million in income and corporate tax cuts. Montana and Wyoming cut property taxes.

California not alone with budget woes

This year’s budget debacle in California overshadowed similar budget showdowns in Arizona, Connecticut, Illinois, North Carolina, Ohio and Pennsylvania, but experts say the Golden State’s dilemma could be a precursor of the fiscal headaches yet to come as states weather the longest recession since World War II.

California'sSchwarzenegger (R) and the Democratic-controlled legislature finally agreed to a controversial plan to close the state’s monstrous shortfall, after voters in May rejected a plan that would have allowed the state to borrow $5 billion from future lottery profits and extended for another two years the temporary 1-cent sales tax increase approved earlier in the year. State finance officials already are projecting a $7 billion to $8 billion shortfall for the next fiscal year.

New York, pummeled by Wall Street’s implosion, is bracing for deficits expected to climb to $6 billion over the next year after it closed a $17.7 billion budget hole this year by raising income taxes on the rich and imposing a variety of hefty fees on state services.

Even states that have been largely spared from the recession are being forced to make cuts. Idaho reduced year-over-year funding for elementary and secondary education for the first time in its history. Energy-rich Wyoming trimmed its budget for the first time in at least 20 years as it financial forecasts sobered.

Worse is yet to come

State leaders began the year knowing that the country was officially in a recession, but few could predict how dire their fiscal predicament would be.

In the current recession — now19 months long and still going — states have tackled greaterbudget shortfalls thanthey faced in the five years it took them to recover from the last national recession after the 2001 terrorist attacks, according to NCSL data.

While 2009 is grim, states worry 2010 and beyond will be even worse. Even if the national recession ends this year as many predict, the outlook for states is bleak. State fiscal conditions historically lag behind national economic recovery. The year after a recession ends is typically when state budgets are hit hardest, because by then, Medicaid rolls have swelled with the higher numbers of the unemployed who have lost their health insurance.

Many state leaders also predict serious budget trouble when the flood of federal stimulus money ends in 14 months. At least six Republican governors came under fire for turning back a small portion of their stimulus share for fear of trouble funding new or expanded programs after the stimulus money runs out.Most of the $275 billion that states will receive from the $787 billion package will be spent in fiscal 2009, 2010 and 2011 budgets, with fewer dollars available in fiscal 2012.

See Related Stories:
Reports: Bleak state budgets through 2011 (6/4/2009)
State budget gaps top $200 billion; fees,taxhikesin the works (4/24/2009)
Downturn creates state spending 'czars' (4/9/2009)
Tracking the recession – Much ado about a small stimulus pot (4/6/2009)
Tracking the recession: Stimulus holds states accountable (3/3/2009)
Govs split over expanding jobless benefits (2/26/2009)
Stimulus to ease, not fix, state budget woes (2/14/2009)
Depressed economy wallops states (10/24/2008)
2007 marked by activism (12/31/2007)
Surpluses, social issues mark 2006(12/26/2006)
Contact Pamela M. Prah at pprah@stateline.org.

—Stateline.org staff writers Stephen C. Fehr, John Gramlich, Christine Vestal, Daniel C. Vock, Pauline Vu and interns Emily Kimball, Kimberly Leonard, Tony Romm and Rob Silverblatt contributed to this report.

• Links to daily news and summaries of the governors' speeches
  
  
• Full text of governors’ addresses going back to 2000
  
  
• Dates for state of the state speeches

By Karen Knee

Inquirer Staff Writer

Back in 1971, Philip Zimbardo locked students in basements beneath Stanford University to see what would happen.

It's not difficult to imagine his doing this. Zimbardo, with his slicked-back, black hair, sharp nose, and devil T-shirt, looks remarkably like a cartoon villain. And the outcome of his Stanford Prison Experiment was truly dark - in less than a week, ordinary college students assigned to the role of prison guard had turned viciously sadistic, while those designated as prisoners cowered in terror.

But now, Zimbardo says, he's changed. In his opening lecture last month at the First World Congress on Positive Psychology in Philadelphia, he emphasized this point by blasting Santana's "Evil Ways" through the speakers of the Center City Philadelphia Sheraton. And 1,600 positive psychologists stood up and danced.

For too long, says Zimbardo, psychologists - including himself - have spent most of their time trying to understand how and why things go wrong. This work has produced, among other benefits, effective therapies for mental illnesses. But mental health, like physical health, means more than just eliminating sickness. It means activelythriving.

Can science shed light on what it takes to flourish? Zimbardo thinks it can. "We ask big questions and come up with solid answers based on the best experimental data," he explained. Below, we offer a few snapshots from talks presented at the congress, featuring positive psychologists quantifying some of the most personal aspects of the human experience - things such as passion, love, and our perception of time.

Time out of mind

Facts. Emotions. Logic. If you ask most people what they base their decisions on, this is the type of answer you're likely to get. But Zimbardo thinks it's not the whole story - or even most of it.

"The main thing that determines your decisions," he said, "is something you're unaware of - your perspective on time."

Imagine going out to lunch with co-workers and deciding whether to have that second martini. You could approach the decision by considering what happened last time you drank too much at lunch, or by envisioning how it would affect your work performance later in the day. You could focus on how much fun it would be right now. Or you might figure that you never get much done in the afternoon anyway, so why not?

These four responses are typical of distinct time perspectives: past, future, present-hedonistic, and present-fatalistic.

Zimbardo and his colleagues created a time-perspective survey and gave it to thousands of people. Many had a single, strong time orientation, but some were more mixed.

Not surprising, college students scoring high in the present-hedonistic category were more likely to drink, smoke, use drugs, and drive dangerously.

But in older people recovering from heart trouble, a present-hedonistic orientation had the opposite effect. Elderly people who lived for the moment were more likely to take responsibility for their health.

That's because older people can't take good health for granted, the Canadian researchers who conducted the study said. Many simple daily pleasures are only possible if seniors take care of their bodies. And some activities that give immediate gratification - such as socializing with friends and being physically active - also have long-term health benefits.

The first step to making better decisions, Zimbardo says, is to understand how your own time perspective biases your thinking. Then you can start nudging it a little closer to the ideal: feeling positive about the past, planning for the future, and savoring the occasional splash of present hedonism. Take the test and see how you measure up atwww.thetimeparadox.com.

Talk about the passion

Whether it's a dream set far in the future or a momentary pleasure, most of us are passionate about something. But University of Quebec professor Robert Vallerand is passionate about, well, passion.

He and his research group developed a survey to measure people's passion for their favorite activities. People rate how strongly, on a scale of one to seven, they agree with statements such as, "If I could, I would only do this activity," or "This activity reflects qualities I like about myself." Strong agreement with either statement is a sign of passion.

Not just the intensity, but also the type of passion matters. Vallerand and his colleagues identified two main kinds of passion: obsessive and harmonious. A person who is obsessively passionate about his favorite activity would agree more with the first statement, while someone whose passion is harmonious would agree more with the second.

When things are going well, it's hard to distinguish between these two types of passion. But when obstacles arise, they can lead to very different behavior.

Obsessively passionate cyclists braved Quebec's frigid winter weather to complete their daily bike rides, while those who were more harmonious spun at home or at the gym. Similarly, obsessively passionate dancers had more trouble taking enough time off to fully heal after an injury, sometimes leading to chronic damage.

Passion matters not only to individuals, but also to society, Vallerand said.

When he compared high-achieving professionals profiled by the Montreal newspaper La Presse with a random sample of people from an evening commuter train, he found that the high achievers were more passionate. They also worked an average of nine hours more per week.

What can you do to cultivate harmonious passion? Vallerand suggests three steps. First, select an activity you like, and set aside enough time to do it regularly. Second, internalize the activity - make it part of how you see yourself. Finally, focus on enjoying the activity and improving your own performance - not avoiding failure or doing better than others.

For better or for worse?

Passion can ignite romantic attraction, but the fate of relationships may depend on surprising details - such as how one spouse responds to the other sharing some good news.

Shelly Gable, a psychologist at the University of California at Santa Barbara, studies how couples respond to positive events, which could range from winning a casual Frisbee game to getting that long-awaited promotion at work.

Psychologists already knew that if one partner in a relationship provided support after a negative event, this helped the other partner and strengthened the relationship. But no one had looked at positive events.

When Gable did, the results surprised her. Enthusiasm after a positive event strengthened the relationship more than support after a negative event.

"I thought it would be important, but not as important as it was," she said, adding that needing help can make people feel incompetent or indebted.

Another unexpected result was that a passive, supportive response - like saying, "That's nice, honey," and then turning back to the computer - was almost as damaging as actually putting down the good event.

Luckily, giving active, constructive responses is a skill anyone can develop. "You don't have to be effervescent," Gable said. All you really have to do is show you care.

Contact staff writer Karen Knee atkknee@phillynews.comor 215-854-5728.