Nov/Dec 2009

State News: August 2009



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Governors Say Economic Situation ‘Scary’

By Mary Branham Dusenberry, CSG Managing Editor
Connecticut Gov. M. Jodi Rell was blunt on the state of her state: “It’s scary.”
She could have been speaking for most of the 50 other governors, many of whom painted a grim fiscal picture in their state of the state addresses in January and early February.
The national economic situation has stopped or slowed efforts to address state problems in education, health care and infrastructure, among other areas, the governors said in their annual addresses.
In fact, many governors proposed freezes in state employment and/or in state employee wages, and some even proposed pay cuts.
Governors in several states—including Alabama, Alaska, California, Colorado, Hawaii, Kansas, Kentucky, Minnesota, Montana, Nevada, Pennsylvania and Virginia—proposed hiring freezes, wage freezes and/or pay cuts for state employees in their State of the State addresses.
Michigan Gov. Jennifer Granholm took the wage cuts a step further: She directed the State Officers Compensation Commission to reduce the salaries of all state elected officials in Michigan by 10 percent. And Minnesota Gov. Tim Pawlenty imposed a wage freeze on state employees for two years, and proposed legislation requiring a wage freeze for any Minnesota government entity that accepts state money.
Nevada Gov. Jim Gibbons stressed a 6 percent pay reduction for state employees would be better in the long run than wide-scale layoffs. “We cannot give raises with money we do not have,” he said.
California Gov. Arnold Schwarzenegger planned to have his Department of Personnel Administration to give agencies lists of people who would receive layoff warnings earlier this week. According to the state’s Legislative Analyst’s Office, each 2,000 people laid off would save the state $150 million.
And that’s not all. A budget impasse in Kansas has put tax refunds, employee paychecks and money for schools on hold for now, according to an article in the Kansas City Star.
Governors across the country projected cuts in everything from education to Medicaid, and planned to dip into the states’ rainy day funds, although some states—like North Dakota—were planning to build their reserves.
Read more about the governors’ State of the State addresses in the March State News.

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