43 States Have Cut Social Services

It doesn't take an economist to know that budget cuts to social services put people in jeopardy. Unfortunately, new data from the Center of Budget and Policy Priorities shows that 43 states -- so far -- have cut social services in response to the recession. As poverty advocates know, though, as resources available for these services have declined, the need has actually increased.

In the past two years, 37 states reduced funding for higher education, 29 states cut funding for subsidized health care, 28 states and Washington, D.C. decreased funding for K-12 education and 24 states and D.C. scaled back services for the elderly and disabled. Without the $140 billion earmarked for social services in the American Recovery and Reinvestment Act, experts say cuts would have been even greater.

The causes and effects of this more modest spending can't help but become a punishing cycle. Just as the economy negatively affected states' tax revenue, it affected an individual's ability to get or keep a job. All of a sudden, he can't provide for his family, and neither can the state. Funding cuts to needy families result in less discretionary income going back into the cash registers of local businesses. State leaders realize this -- how could they not? -- but the response, including raising taxes in 30 states since the recession began, isn't making up the difference. Of course, people who are still in their homes and working and able to continue paying taxes are left with less money to put back into the economy. (The Center of Budget and Policy Priorities recommends more tax increases focused on upper-income households, which would result in reduced savings rather than in the reduced consumption seen among less comfortable families.)

It gets worse. Based on recent budget proposals from governors for the 2011 fiscal year, California might repeal CalWorks, the state's welfare program for families; Mississippi might cut K-12 school funding by nine percent and close four mental health hospitals; and Arizona might cut the children's health insurance program entirely. Most every state has some proposal for cutting aid to the needy; but none have any idea how to get back on track.

Photo credit: Neubie