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States cut budgets, seek federal help

Utah has reduced spending by 6.9%

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States nationwide reported Monday that they are slashing already-approved budgets and revenue projections as the recession deepens, and they called on Congress for help.

Twenty states have already cut $7.6 billion from their July-June fiscal 2009 budgets, and 30 have identified additional shortfalls totalling more than $30 billion, according to a report by the National Governors Association and the National Conference of State Legislatures.

So they asked Congress for quick action on an economic recovery package that would include creating jobs by increased spending on ready-to-go infrastructure projects — such as highways, bridges, transit systems and water systems — and helping to fund expanded unemployment benefits, Food Stamps and Medicaid.

"The slowing economy is resulting in growing unemployment, increased demand for state services and significant declines in state revenues," said Vermont Gov. Jim Douglas, the vice chairman of the National Governors Association.

The states' report noted, for example, that Utah state government projects cut spending in the state's general fund by 6.9 percent between fiscal 2008 and 2009. The report said that the state's projected sale tax revenue in fiscal 2009 is down by $2.4 million from expected levels.

Pennsylvania Gov. Ed Rendell, the NGA president, called for Congress to create jobs by increasing funding for "a broad array of infrastructure projects including airports, bridges, highways, transit systems, ports, rails, clean water, sewers and broadband."

He said, "Investments in ready-to-go infrastructure projects are a cost-effective creator of high-paying jobs."

Douglas added, "As governors work to reduce budget shortfalls and plans for the coming fiscal year, we need to be partners (with Congress) in an economic recovery strategy that includes additional funding for Medicaid and investments in infrastructure."

A second report released Tuesday, from the national consumer health organization Families USA, also pushed for Congress to pass stimulus package to help states fund Medicaid for the poor.

"It would enable Utah to meet the growing health-care needs of its families while providing a major boost to the state's economy," said Ron Pollack, executive director of Families USA.

The Families USA report said that an additional $174 million in Medicaid support for Utah would help create 3,600 jobs with $120.6 million in new wages.

The report noted that Utah is among 13 states that have enacted or are considering reductions in benefits covered by Medicaid or insurance for children. It said Utah eliminated Medicaid coverage of occupational therapy, physical therapy, speech and hearing services, vision care and chiropractic services for the remainder of fiscal 2009 and for fiscal 2010.

E-mail: lee@desnews.com