All signs are pointing to a revenue rebound for most states in the Midwest in fiscal year 2011. However, thanks in large part to a loss in federal funding, state lawmakers will face perhaps their biggest fiscal challenge yet in crafting FY 2012 budgets.
In an election year that will determine who draws the nation’s political maps and also will serve as the first indicator of President Barack Obama’s re-election chances, no region of the country matters more than the Midwest, Pulitzer Prize-winning journalist David Broder said during an Aug. 10 speech at the Midwestern Legislative Conference Annual Meeting.
This edition of Firstline Midwest is Part 2 of a two-part series on state responses in the Midwest to the budget crisis. Part 1 focuses on the revenue side, particularly proposals in 2009 to close budget gaps through tax increases or gambling expansions. Part 2 examines short- and long-term strategies to control spending.
Prior to the last two fiscal years, state budgets were being passed and balanced with fairly robust increases in state spending: on average, about 6 percent annually between 1979 and 2008....