SAN FRANCISCO - Governors across the West painted a gloomy picture of the region's economy in their state of the state speeches last week.
Usually an occasion to brag about accomplishments and make big promises for the year to come, leaders - faced with gaping budget deficits and surging joblessness across the region - largely ditched the usual script and used their speeches to ask for patience as they cut budgets, raise taxes and reduce social services amid hard economic times.
"I will not give the traditional state of the state address here today because the reality is that our state is incapacitated until we solve the budget crisis," said California Gov. Arnold Schwarzenegger in his second-to-last state of the state speech. "The truth is that California is in a state of emergency."
Schwarzenegger's address to the Legislature lasted a mere 11 minutes and 54 seconds. The biggest U.S. state faces the biggest budget deficit in the nation. The Republican governor, who will leave office due to term limits in early 2011, estimated that the 2-year gap now totals $41.5 billion, or about 20% of the general fund for the current and upcoming budget years.
California's crisis is particularly acute because lawmakers cannot agree on a solution. Controller John Chiang said Friday that he will begin delaying state payments, including income tax returns, on Feb. 1. That will allow him to make debt service and education payments that cannot be delayed under state law.
California is not alone in its misery. Nevada's revenue downturn is even deeper, though officials there moved much more quickly to balance the budget. Even governors in states that long looked relatively insulated from the recession, such as Idaho, Oregon, and Wyoming, are now cutting budgets.
In Nevada, Gov. Jim Gibbons introduced a biennial budget proposal that would cut state spending by 9% to $6.2 billion in the 2009-2011 budget cycle, compared to the previous budget. The Republican asked for a 3% hike in hotel room taxes, even as he proposed a 6% cut in state worker pay, including teacher salaries.
"For many years, people believed that our state was recession-proof," Gibbons said Thursday. "Unfortunately, this economic downturn has shown that this simply is not the case."
He said the state has seen revenue decline 30% since the recession began. The state's unemployment rate rose to 8% in November, almost twice the year earlier figure and the highest jobless rate in 24 years. That's the second highest in the region after California's 8.4% and the fifth highest in the nation.
"The combination of tight credit markets, sharp declines in discretionary spending and record-low consumer confidence has caused our two major industries, construction and tourism, to suffer drastic reductions," Gibbons said. "The numbers are daunting."
The budget proposal drew instant protest from lawmakers and from education leaders across the state.
"Many of Nevada's families and businesses are being stretched to their breaking point," the governor said. "I will not ask these businesses and individuals to pay more when they have less."
In conservative Idaho and Wyoming, governors proposed similar spending cuts to "ride out the storm," as Wyoming Gov. Dave Freudenthal, a Democrat, put it in his state of the state speech Wednesday.
Even in the Pacific Northwest - where Democrats rule with solid majorities - governors are proposing cuts in operating budgets this year, alongside tax increases and extra infrastructure spending to stimulate the economy.
Oregon Gov. Ted Kulongoski, a Democrat, used his state of the state speech last Monday to make a fairly traditional push for new programs.
He asked lawmakers pass the $500 million-a-year transportation infrastructure package he proposed in November. He also pushed for universal health care coverage for children.
"When times are tough, children go to the head of the line," Kulongoski said. "That means finding the political courage to raise revenue."
House Republican Leader Bruce Hanna, R-Roseburg, called the governor's plan to raise taxes during a recession "a recipe for economic disaster." The state economist on Friday forecast a budget gap of as much as $740 million in the current biennium with worse to come in the next budget cycle.
In Washington, Democratic Gov. Chris Gregoire - who is under fire for a budget proposal that refused state workers their contractual pay raises - called Thursday for a $1.2 billion economic stimulus package that would include $817 million of infrastructure spending and the sale of $100 million in new bonds.
"We can quickly create thousands of new jobs this year and next by accelerating nearly $1 billion in public works projects," Gregoire said. "The plan will create a legacy of roads, schools, and green-collar jobs to thrust our state firmly into the 21st century."