Report: In Fiscally Stressed States, Public Prefers Spending Cuts

Published October 27, 2010

Residents of five diverse, fiscally stressed states have similar priorities for state government, but their preferences clash with budget realities and show distrust of their governments, says a new report by the Pew Center on the States and the Public Policy Institute of California (PPIC).

The report is based on surveys of public attitudes in Arizona, California, Florida, Illinois, and New York. Residents were asked about the fiscal crisis facing states and what they think their elected officials should do about it.
Together, the five states surveyed constitute almost a third of the U.S. population and economic output. Collectively, they accounted for 45 percent of states’ total projected budget gaps for fiscal year 2011.

The October report, “Facing Facts: Public Attitudes and Fiscal Realities in Five Stressed States,” is the first in-depth, multistate read on how residents view their state’s budget problems during the nationwide economic downturn and what they think lawmakers should or should not do about them.
The report highlights five key findings across the five states:

1. Government Performance Matters.
Public sentiment for reducing waste and making state government more efficient and effective is more widespread in the five states surveyed than are complaints about the size of government. Although at least four in 10 in Arizona, California, Florida, Illinois, and New York say state government is too big, even more respondents express a sense that state government can be run better, with less waste and more efficiency.

Majorities in four of the five states say “a lot” is wasted. About two out of three residents say their state government could spend less and still provide the same level of services. Most of those respondents think there is room for reductions of 10 percent to 20 percent or more.

Spending cuts are the most popular first choice for balancing state budgets—yet at least four out of five respondents are either somewhat or very concerned about the effects of cuts on services. Overall, the most robust message is that residents would like state leaders to maximize returns on taxpayers’ dollars.

2. Protect the Essentials.
By a range of 63 percent to 71 percent, majorities in all five states say they would be willing to pay higher taxes to keep K-12 public schools at current funding levels. Fifty-two percent to 57 percent say they would pay higher taxes to preserve funding for health and human services.

These findings make clear what respondents want government to prioritize—but they also complicate the task for policymakers. The size of budget shortfalls in all five states will make it difficult to fully protect K-12 education and Medicaid, the biggest recipients of state dollars. Doing so would compel deeper cuts everywhere else, and even that might not be enough.

3. Tax the Other Guy.
Residents would prefer to charge others—particularly the wealthy, corporations, and smokers, drinkers, and gamblers. These revenue streams likely would not be sufficient to address their state’s budget shortfalls.

4. No More Borrowing.
Residents of the five states are tired of lawmakers passing the costs down to future generations. Overwhelmingly, they would rather keep cutting services and raising taxes, if necessary, than have short-term deficits papered over with borrowing.

Given three choices of how to balance state budgets, more than two-thirds of residents in all five states pick spending cuts first. They prefer tax increases second, and then borrowing.

Across the five states, only 5 percent to 11 percent of respondents choose borrowing as the top option for balancing their state’s budgets.

5. Lack of Trust—and Desire for Reform.
Across all five states, two-thirds or more of respondents report they either never trust state government to do what is right or trust it only some of the time. Residents overwhelmingly believe their state should pursue major reforms to their budget processes, and pursue them now.

“There is a disconnect between what the public wants and what is needed to resolve the states’ fiscal crisis,” said Susan Urahn, managing director of the Pew Center on the States. “Policymakers will have to make unpopular budget decisions to help their states fully recover.”

“After years of economic and fiscal challenges, residents of these stressed states are frustrated and distrustful. New leaders will have much ground to make up post-November,” said Mark Baldassare, president and CEO of the Public Policy Institute of California. “They will need to begin to build public confidence in the effectiveness and efficiency of state government.”

Some States Harder-Hit
At least 1,000 residents were interviewed in June 2010 in each of the five states to provide statistically sound findings within each locale and allow for rare multistate comparisons.

These five states were chosen because each has faced unusually severe fiscal stress in the economic downturn, including some of the highest unemployment rates, biggest home foreclosure rates, or largest state budget gaps in the country. They are diverse geographically and politically.

Some other states are experiencing economic or budget problems of similar magnitude, and they are even greater in some cases, so this selection in no way implies these are the five hardest-hit states.

Prepared by the Pew Center on the States.

Internet Info

“Facing Facts: Public Attitudes and Fiscal Realities in Five Stressed States,” the Pew Center on the States: