CSG South

This presentation discusses some of the actions taken by states in grappling with the serious fiscal challenges that have arisen in the past few years. It consists of two interconnected parts. Part I looks at broad national economic trends and some trends at the state level. Part II delves into some of the more innovative strategies adopted by policymakers to overcome the budget shortfalls that have plagued states for almost four consecutive years now.

Privatization continues to be a controversial management issue in state governments. In the past five years, 1997-2002, the extent of privatization activities in the states has largely remained the same as in the previous five years or slightly increased. The main reasons for privatization are a lack of personnel or expertise and cost savings. In most cases, privatized services account for less than 5 percent of agency services, while reported costs savings range from none to less than 5 percent. But many state agency directors surveyed seem to have no clear ideas as to how much has been actually saved from privatization. Nevertheless, privatization is likely to continue in the states in the next few years as in the past decade.

Chapter 1 of the 2003 Book of the States contains the following articles and tables:

Medicaid stands out as the program hit hardest by the economic downturn and rising health care costs. Governors, legislative leaders and Medicaid officials around the country see the program’s current cost trajectory as unsustainable in both the short-term and the long-term. Yet, states have faced similar situations before. As in previous eras of runaway cost growth, state leaders are marvelously adept at developing coping mechanisms. Emerging trends in state responses to the Medicaid crisis may indicate the future direction of Medicaid policy.

2002 was a major election year for legislatures, with over 85 percent of all seats up for election, resulting in more than 26 percent turnover among legislators in election states. The Republican Party netted more than 175 legislative seats across the country and wound up with more seats than the Democrats for the first time in 50 years. Republicans now hold control of 21 state legislatures, compared to 16 for the Democrats. Twelve legislatures are split between the two parties and Nebraska is nonpartisan.

An assessment of political parties in the legislature shows an imbalance in their performance of the overlapping functions of representation on the one hand and governance on the other. In every respect but mobilizing and educating voters, legislative parties are doing an excellent job representing their constituencies. But the performance of the governance function, and especially the tasks of consensus building and institutional maintenance, is more problematic.

Until recently, literature about the effects of term limits was by necessity speculative in nature. However, a recent multistate study undertaken by three legislative organizations and a team of political scientists has begun to outline the changes taking place in term-limited state legislatures.

Chapter 5 of the 2003 Book of the States contains the following articles and tables:

This article examines the success of the states in redrawing state legislative-district lines after the 2000 Census of Population. It describes the trends of this decade and highlights state experiences in dealing with both old and new issues in redistricting. Whereas the redistricting round of the 1990s was quite litigious, the 2000 round was less litigious with the states having high levels of success in adopting plans without judicial interference.

The distribution of federal funds affects a wide array of organizations, individuals and activities throughout the United States economy. Data abound on the size of the overall federal government budget and on spending by federal departments and agencies. However, only one primary source shows not only the agency and program detail, but also the geographic distribution of these funds: the U.S. Bureau of the Census’ Consolidated Federal Funds Report. This article provides details and insights into the make-up and significance of these huge flows of federal funds on state and local areas.