State news roundup

February 10, 2011

Yesterday, the LA Times reported Gov. Jerry Brown (D) is cancelling the sale of 11 state buildings. The sale was initially negotiated by the administration of former Gov. Arnold Schwarzenegger (R) to bring in $1.2 billion to balance the state budget but Gov. Brown says it was simply a budget gimmick that would have supplied only short-term cash.

Gov. Rick Scott (R) revealed his plans for Florida’s FY2012 budget on Monday. To live up to the big cuts he promised, The Wall Street Journal says he will be “overhauling Florida’s Medicaid program, curbing its pension system and trimming government services.” The $65.9 billion budget features $4.6 billion in cuts over the fiscal 2011 budget. According to Jerry McDaniel, Gov. Scott’s budget chief, the governor will be flexible with his recommendations. “He is not suffering under the idea that everything we have proposed here will pass,” McDaniel said. “He’d like a lot of it to pass. He believes it’s a good budget for the state of Florida.”

Governors across the nation and across party lines are making cuts to deal with the budget crisis. Gov. Andrew Cuomo (D) plans on reducing funding for education and Medicaid to close New York’s $10 billion budget gap, while Gov. Brian Sandoval (R) plans on rolling back education spending in Nevada to 2007 levels. The Washington Post noted, “Democratic and Republican governors have sounded strikingly similar refrains as they vowed to shrink the size of their governments.”

The Philadelphia Inquirer reported that the looming state deficit has put the Redevelopment Assistance Capital Program (R-Cap), which was fiercely supported by former Gov. Ed Rendell (D), under scrutiny. Developed in 1986 to create jobs, stir the economy, and preserve Pennsylvania’s heritage, R-Cap has granted $2 billion for building projects, including sports stadiums, museum wings, and factory expansions. The grants have been compared to earmarks or walking-around money for state legislatures but they are not included in the annual operating budget or considered part of the deficit since they are financed through bond issues. However, they are paid off, including interest rates and fees, over time with taxpayer money. Defenders of the program claim that “one person’s pork is another person’s meat,” and that R-Cap is responsible for the state ranking third in the nation for job growth in 2009.  But critics contend it is shrouded in secrecy and that the program needs to be reviewed and reorganized.

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