How to bridge the funding gap

Unlike Arkansas, most states (31 of them) have found themselves trying to bridge a revenue shortfall in order to keep a balanced budget. What have they done in response? According to the National Conference of State Legislatures, they haven't raised taxes. Rather, here's a summary of action taken by states with budget shortfalls:

• Cut spending: 10 states made across-the-board reductions; 12 targeted higher education; 11 cut elementary-secondary education; and 10 cut Medicaid.

• Trimmed state payrolls: Florida, Maine, Tennessee and Vermont laid off state employees, and nine states imposed hiring freezes.

• Tapped reserves: 14 states tapped rainy-day or other reserve funds. Nevada used $267 million, virtually eliminating its rainy-day fund; Minnesota used $500 million, nearly half its balance; and Massachusetts used $310 million.

• Used tobacco funds: Oklahoma borrowed $100 million in excess tobacco tax funds, and Vermont used proceeds from its legal settlement with tobacco companies to help cover Medicaid costs.

• Expanded gambling: Delaware allowed tracks to operate 24 hours a day, while Rhode Island is letting casinos stay open 24 hours three days a week.

In addition, even though tourism may be down in most states, states that draw international tourists (such as Florida) are the benefactor of European tourists taking advantage of our weak dollar.