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.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.
• 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.