Center for Budget and Policy Priorities: The Great Recession's Impact on Services for Children, the Elderly, the Disabled, and Families

(The Political Bridge has received permission to publish materials from the Center on Budget and Policy Priorities)

At least 45 states plus the District of Columbia have enacted budget cuts that will affect services for children, the elderly, the disabled, and families, as well as the quality of education and access to higher education (see table on page 5). Those cuts are detailed below.

Public Health Programs

At least 29 states have implemented cuts that will restrict eligibility for health insurance programs and/or access to health care services.

• Arizona has capped enrollment in KidsCare, the state’s CHIP program. Nearly 10,000 working parents in Arizona have already lost health care coverage that they received through KidsCare, due to a lack of funding for the parental component of the program. The state is also reducing its Medicaid rolls by requiring some adult beneficiaries to reapply for benefits more frequently. (Research has shown such added paperwork requirements cause many eligible people to lose coverage.)
• In the state’s latest budget agreement, California cut funding for the Healthy Families program, the state’s CHIP program. To make up for the lost funds, the nearly 1 million children in the program will have to pay more for visits to health care providers, and many will have to pay higher premiums as well. These cost increases may cause some families to drop from the program. In addition to these changes, the state cut nearly all funding for services supporting HIV/AIDS patients, and it completely eliminated funding for the state’s domestic violence shelter program and maternal, child, and adolescent health programs.
• Massachusetts sharply cut funding for subsidized health insurance for close to 28,000 legal immigrants. The affected individuals will receive at best a level of health coverage that falls far short of basic health insurance.
• Minnesota has eliminated funding for its General Assistance Medical Care program, which provides health care to 29,500 low-income persons between the ages of 21 and 64 who have no dependent children and do not qualify for federal health care programs.
• New Jersey’s new governor has announced plans to eliminate eligibility for a key state-subsidized health insurance program for nearly 12,000 legal immigrant adults and to freeze new enrollment in the program for other adults.
• Rhode Island has reduced the maximum income level at which parents can receive public health insurance to 175 percent of the federal poverty line from 185 percent, eliminating coverage for approximately 1,000 parents.
• Utah cut Medicaid funding for physical therapy, occupational therapy, and speech and hearing therapy services for adults — as well as Medicaid provider rates for hospitals, skilled nursing, and dentists.
• Washington is increasing premiums by an average of 70 percent for a health plan serving low-income residents. Premiums for the poorest plan members — those earning up to 125 percent of the poverty line — will double. The premium increase is expected to cause between 7,000 and 17,000 enrollees to leave the program.
• Several states, including California, Michigan, Nevada, and Utah, have dropped coverage of dental and/or vision services for adult Medicaid recipients.
• Other states that have enacted cuts in Medicaid or CHIP include Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Wisconsin, and Wyoming. Cuts include reduced or frozen reimbursements to health care providers.

Programs for the Elderly and Disabled

At least 24 states and the District of Columbia have cut medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities or significantly increased the amounts that such people must pay for services.

• Alabama has ended homemaker services for approximately 1,100 older adults. These services often allow people to stay in their own homes and avoid nursing home care.
• Arizona has eliminated temporary health insurance for people with disabilities who are coping with serious medical problems. The state also eliminated general assistance, a program designed to provide time-limited cash assistance to adults with physical or mental disabilities. In addition, in February 2009 the state eliminated independent living supports for 450 elderly residents and respite-care funding for 130 caregivers. It also established a waiting list for vocational rehabilitation services, affecting 2,100 disabled individuals.
• Florida has cut Medicaid reimbursements to hospitals and community-based services for the elderly, such as meals and homemaker services.
• Georgia has reduced such programs for the elderly as services for people with Alzheimer’s Disease, elder service centers, prescription drug assistance, and elder support.
• In Massachusetts, the governor has ordered cuts in programs for elders, including home care, geriatric mental health services, and prescription drug assistance.
• Minnesota has capped enrollment at current levels for a program that provides expanded health services and care coordination for people with disabilities. The state has also restricted enrollment in or scaled back a number of programs that allow the elderly and disabled to receive services in their home that they might otherwise only be able to receive in a nursing home, hospital, or other institution. As a result, thousands of elderly and disabled Minnesotans will see their access to these services denied or significantly reduced.
• New Mexico has cut cash assistance payments for low-income disabled residents by one-third. The state provides these payments to an average of 2,100 disabled individuals each month who cannot work and are not eligible for Temporary Assistance for Needy Families (TANF).
• Pennsylvania has cut its state supplemental security income (SSI) supplement by $5 per month for individuals and $10 per month for couples.
• Ohio has eliminated virtually all state funding for mental health treatment for individuals who are not eligible for the state’s Medicaid program.
• Tennessee has reduced community-based services for people with intellectual disabilities and cut nursing services for some adults with serious disabilities.
• Vermont has reduced some home-based services, such as housekeeping and shopping, for people who are elderly or disabled. Such services help people stay in their own homes and possibly delay or avoid more expensive nursing home care.
• Virginia has decreased reimbursements for special hospitals serving people with needs related to mental health, mental retardation, or substance abuse. The state also reduced pass-through grants for various aging programs and funding for local mental health providers.
• Other states that have capped or reduced funding for programs that serve people who have disabilities or are elderly include California, the District of Columbia, Kansas, Louisiana, Maine, Maryland, Michigan, Missouri, North Carolina, South Carolina, Utah, and Washington.

K-12 Education and Other Childhood Education Programs

At least 29 states and the District of Columbia have implemented cuts to K-12 education.

• California is reducing K-12 education aid to local school districts by billions of dollars. It also is cutting a variety of other programs, such as adult literacy instruction, and is reducing funding for some grants and programs aimed at helping high-needs students.
• In enacting its FY 2010 budget Georgia made a $112 million cut to the equalization component of the state’s education aid formula established to help close the gap in funding between wealthier and poorer school districts. The state has since made an additional $332 million mid-year cut to state education aid funding.
• Due to budget cuts Hawaii teachers must take 17 furlough days during the current school year. Classes will be cancelled on these furlough days, shortening the school year by more than three weeks.
• Illinois has reduced funding for early childhood education by 10 percent. As many as 10,000 children could lose eligibility for the program as a result.
• Maryland cut funding for a school breakfast pilot program, professional development for principals and educators, health clinics, gifted and talented summer centers, and math and science initiatives.
• Michigan cut its FY 2010 school aid budget by $382 million (2.9 percent) from the prior fiscal year, resulting in a $165 per-pupil spending reduction.
• Mississippi cut its FY 2010 funding for K-12 education by nearly 5 percent. Most of this cut came out of the Mississippi Adequate Education Program, the state’s school funding formula, used to determine adequate funding levels needed in every district in the state.
• Massachusetts enacted cuts to Head Start, universal pre-kindergarten programs, and early intervention services to help special-needs children develop appropriately and be ready for school. The state also cut K-12 funding, including spending for mentoring, teacher training, reimbursements for special education residential schools, services for disabled students, and programs for gifted and talented students.
• In Nevada, the governor has ordered various cuts to K-12 education, including delaying an all-day kindergarten expansion, cutting per-pupil expenditures by $400 in a pilot program, eliminating funds for gifted and talented programs and a magnet program for students who are deaf or hard of hearing. Additionally, young children with developmental delays will lose more than 15,000 hours of needed services.
• New Jersey has cut funding for afterschool programs aimed to enhance student achievement and keep students safe between the hours of 3 and 6 p.m.. As a result, more than 11,000 students will likely lose access to these programs, and 1,100 full and part time workers will likely lose their jobs.
• Rhode Island cut state aid for K-12 education and reduced the number of children who can be served by Head Start and similar services by more than 550.
• State education grants to school districts and education programs have also been cut in Alabama, Arizona, Connecticut, Delaware, the District of Columbia, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Nebraska, Ohio, Oregon, South Carolina, Utah, Virginia, and Washington.

Colleges and Universities

At least 39 states have implemented cuts to public colleges and universities and/or made large increases in college tuition to make up for insufficient state funding.

• As a direct result of state budget cuts, the University of California is increasing tuition by 32 percent. In addition, the University of California is cutting freshman enrollment by 2,300 students, and the California State University system is cutting enrollment by 10,000 students.
• Florida has cut university budgets and community college funding. The University of Florida has announced it will eliminate 150 positions this year, resulting in over 50 layoffs of staff and faculty. Florida State University plans to lay off up to 200 faculty and staff members. Tuition at all 11 Florida public universities will rise by 15 percent in the 2009-2010 school year.
• Cuts to higher education funding in Indiana have resulted in Indiana State University plans to lay off 89 staff.
• Michigan is reducing financial aid programs by $135 million (a cut of over 61 percent), including a 50 percent decrease in competitive scholarships, a 44 percent decrease in the tuition grant program, and an outright elimination of nursing scholarships, the Michigan Work-Study Program, the Part-Time Independent Student Program, the Michigan Education Opportunity Grants, and the Michigan Promise Scholarships. In addition, the state reduced funding for university operations by 0.4 percent from the previous fiscal year.
• New Mexico has eliminated over 80 percent of the funding for the College Affordability Endowment Fund, a need-based scholarship program that serves 2,366 students who do not qualify for other state grants or scholarships.
• At the State University of New York, resident undergraduate tuition increased by 14 percent (over $600 per year) beginning with the spring 2009 semester.
• In Texas, a 5 percent across-the-board budget cut reduced higher education funding by $73 million, affecting financial aid programs for students.
• Virginia’s community colleges recently implemented a mid-year tuition increase in response to state budget cuts. The tuition increase will take effect during the spring 2010 semester.
• Budget cuts reduced state funding for the University of Washington by 26 percent for the current biennium. Washington State University is increasing tuition by almost 30 percent over two years.
• Other states cutting higher education operating funding and financial aid include Alabama, Arizona, Arkansas, Connecticut, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, and Wisconsin.

Cuts in Other Services

States also are making cuts in a variety of other programs, including those for very poor families and other vulnerable populations.

• Arizona is reducing TANF cash assistance grants for 38,500 low-income families, eliminating substance abuse services for 1,400 parents and guardians, and decreasing homeless shelter capacity by 1,100 individuals. The state also stopped accepting new families in its child care assistance program in February 2009, thereby denying assistance to at least 10,000 children.
• California is eliminating cost-of-living adjustments to cash assistance programs for low-income families and cutting child care subsidies.
• In Connecticut, the governor has ordered budget cuts to programs that help prevent child abuse and provide legal services for foster children.
• The District of Columbia cut its homeless services funding by more than $12 million, or 20 percent. It also reduced its cash assistance payments to needy families and cut funding for services that help low-income residents stay in their own homes and communities.
• Illinois has reduced funding for child welfare, mental health, youth services, and other programs.
• In Maine, the governor has cut funding for homeless shelters.
• Maryland has cut reimbursement rates for institutions that provide services to abused and neglected children.
• Michigan reduced funding by 38 percent for the No Worker Left Behind program, a job training and education grant program administered through the Department of Labor.
• Minnesota has cut the state’s renter’s credit by 27 percent, an average of $129. The credit provides a tax refund to over 270,000 low- and moderate-income Minnesota renters.
• The Nevada welfare agency will make it harder for low-income families to receive cash assistance and health insurance, with the expected result that fewer families will receive those benefits. For instance, the state will require some families that have lost benefits to wait longer before reapplying.
• Rhode Islandhas cut funds for affordable housing, eliminated health insurance for home-based child care providers, restricted TANF cash assistance for children, reduced health insurance for retired state workers, and cut support to localities by $10 million.
• The South Carolina Department of Juvenile Justice has lost almost one-fourth of its state funding, resulting in over 260 layoffs and the closing of five group homes, two dormitories, and 25 after-school programs.
• To operate within a reduced budget, the Chief Justice in Vermont ordered the court system to close for half a day each week.
• Texas has cut the number of children in a child care subsidy program by about 4,000 and increased waiting lists.
• A number of other states are making cuts to child care assistance programs, including Massachusetts and Ohio.

Some states, such as Connecticut, Delaware, Maryland, Michigan, Minnesota, New Hampshire, New Jersey, New York, Ohio, Rhode Island, Virginia, and Wisconsin, have implemented cuts to localities, leading to local concerns about reductions in funding for policing, child care assistance, meals for the elderly, hospice care, services for veterans and seniors, and other services.

Cuts in State Government Workforces

At least 42 states plus the District of Columbia are eliminating or not filling various state jobs, imposing mandatory furloughs (time off without pay), or making other cuts affecting their state workforce. Such steps can make it more difficult for residents to obtain state services. Cutting staff — whether on a permanent or temporary basis — also may contribute to increased unemployment.

• A number of states are imposing furloughs and/or pay cuts for some state employees. These include Arizona, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Virginia, and Wisconsin.
• Arizona closed down 11 Department of Motor Vehicle offices, resulting in layoffs of 115 employees.
• Iowa will lay off almost 200 state employees due to a recent across-the-board state agency cut of 10 percent.
• New Jersey has eliminated 2,000 state positions by encouraging early retirement, leaving vacancies unfilled, and laying off staff.
• In recent rounds of budget cuts Maryland has laid off some 270 employees. Most of these positions have come from the Health, Public Safety, and Transportation departments.
• Missouri has laid off nearly 700 workers to address its mid-year deficit.
• The Tennessee governor has announced elimination of over 2,000 state positions, about 5 percent of the state workforce. Some 1,500 employees accepted buy-outs for early retirement.
• In Washington, a hiring freeze imposed by the governor in August 2008 caused the state’s workforce to decline by more than 1,400. In January 2009 the state replaced the freeze with a cap on the number of budgeted positions at each state agency; the state’s workforce is expected to fall by another 2,600 under the cap.
• Virginia has laid off several hundred workers.
• Hiring freezes have also been ordered in Alabama, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Iowa, Kansas, Louisiana, Maine, Michigan, Minnesota, Mississippi, New Hampshire, New Mexico, New York, North Carolina, Pennsylvania, South Dakota, Vermont, Wisconsin, and Wyoming.
• Additional states — such as Florida, Illinois, Maine, Massachusetts, Michigan, Ohio, South Carolina, and Wisconsin, plus the District of Columbia — have laid off or announced plans to lay off state employees.

The U.S. Bureau of Labor Statistics confirms that these cuts are having a significant direct impact on employment. The total number of people employed by state and local governments has fallen by 172,000 since January 2009, at a time when the need for the services produced by those workers has increased. These employment numbers are in addition to other measures such as furloughs and cuts to benefits and wages that also reduce workers’ purchasing power and thereby undermine the ability of the national economy to recover.

End Notes:

[1]Total education funding through ARRA, including both fiscal relief and programmatic funding, was found to have created or saved 326,593 education jobs. US Department of Education, “American Recovery and Reinvestment Act Report: Summary of Programs and State-by-State Data,” November 2, 2009.

[2] Under the proposal, some of these cuts would not take effect if the federal government provides a very large amount of additional aid -- beyond what is currently being considered by Congress -- but most analysts including the state Legislative Analyst Office consider such levels of additional aid unlikely.

[3]February 4, 2010 letter (from Governor Douglas and Governor Manchin) to House and Senate leadership to request assistance for states in protecting jobs and speeding economic recovery by extending the American Recovery and Reinvestment Act's (ARRA) enhanced federal match for Medicaid (FMAP) for two additional quarters.

[4]See Elizabeth McNichol and Nicholas Johnson, “Recession Continues to Batter State Budgets; State Responses Could Slow Recovery,” Center on Budget and Policy Priorities, Revised February 25, 2010.

[5] “Tax Measures Help Balance State Budgets,” revised July 9, 2009 and “Federal Fiscal Relief Is Working as Intended,” revised June 29, 2009.