As states begin the business of spending their stimulus dollars, Stateline.org asked governors attending the National Governors Association winter meeting Feb. 21-23 how they intend to avoid holes in their budgets when the federal money runs out.
What are you doing to make sure
that when the stimulus runs out
your state won’t face big deficits?
That's actually one of the most important things we can do, which is we've got to be very disciplined in the meantime. We've got a $600 million shortfall, 20 percent of our budget. We have to be determined over the next two years ...to make government smaller. I don't think we can count on the economy turning around that quickly. The stimulus money is going to run out. We have to make sure we're in a position in a couple years where we're not on the cliff.
—Delaware Gov. Jack Markell (D)
The important point is that when the state gets funding, it be for things that they can afford long-term. So if they're taking money for certain projects, it should be things they could afford to finish that don't count on follow-on funding … I can tell you in my state, we're not going to be beginning any new programs. This is going to be used to close our budget gap that we face right now. Because your point is the key one: You can't create new programs with money that's for a finite period of time. I think anyone who does that is not being responsible … I think the legislatures and governors in every state have to exercise some important common sense judgment. It's not rocket science.
—Hawaii Gov. Linda Lingle (R)
I think economic activity generated by the stimulus will help us create new opportunities to get revenues from the income tax and the sales tax. Right now those two sources of tax revenue are declining because people aren’t working and they’re very worried about their economic future, so if you can restore public confidence in the fact that we’re going to have a growing economy and you aren’t going to lose your job, and you have the opportunity to buy goods and services that people need, I think that’s a very healthy way to grow the economy and keep the state from insolvency.
—Illinois Gov. Pat Quinn (D)
At the state level, this is actually going to help us balance our budget. We’re able to use significant money for health care, for education, for infrastructure, to help us balance the budget in 2010 and 2011.
—Iowa Chet Culver (D)
One of the risks of the whole stimulus package is that it wallpapers over structural problems that are underneath. If you just bring in one-time cash and don’t fix the underlying problems and don’t reform the underlying problems, the problems just re-emerge down the road. That’s one of the financial seductions of this stimulus bill. `Take the money. Don’t fundamentally fix things,’ is kind of the message of the federal government. Just do business as usual and all will be well down the road. I think that’s going to be potentially very disappointing if states do it that way.
—Minnesota Tim Pawlenty (R)
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The most important thing every state needs to do is make sure they use this one-time money in a one-time way. If any state is starting to use this to plug into ongoing programs or starting new ongoing programs with one-time money, then they're not very good money managers and they're probably already in such big trouble, like California, that these stimulus dollars aren't going to bail them out. They have structural problems.
—Montana Gov. Brian Schweitzer (D)
There’s a lot of funding in there that is going to have to be used very carefully so that you don’t get in a situation where you increase your ongoing expenses, because this is supposed to be one-time money, one-time event. States are going to have to make sure that they don’t end up with a budget deficit situation or a situation where they would increase taxes in the future, because those things obviously would be detrimental to the economy.
—North Dakota John Hoeven (R)
I’m setting up a task force within my office whose sole job will be to monitor these funds. My deputy chief of staff will chair that. There’ll be representatives from different departments of state government, because I fully expect that we’re going to need to report on this regularly, how much has flowed out and for what purposes, how many jobs are being created. And so we’re setting up a mechanism ... so that it’ll flow right through my office. Because at the end of the day, the governors are responsible for making sure this money is being spent wisely, and I intend to do that.
—Rhode Island Don Carcieri (R)
I gave the Legislature a budget with no stimulus money in it. So when I gave them a budget in December, we did dramatic cuts to assume no stimulus money. And now that the stimulus is here, it gives us a little breathing room. I’m telling everybody, use it for its advertised purpose, and if there’s any extra, use it for one-time things, not growing the base budget.
—Virginia Gov. Tim Kaine (D)
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