SACRAMENTO — State legislators in Illinois had to fill a budget hole equal to half of the state's total spending. Part of their solution this past week: Hike income taxes by 66 percent.
In Arizona, where all tax increases require supermajority votes, legislators turned to a unique, one-time fix. They sold the very Capitol building they were voting in.
California legislators aren't alone as they consider deep spending cuts, tax hikes and a reorganization of state government to try to close a $25.4 billion budget gap.
All but 10 states are grappling with budget deficits totaling an estimated $140 billion this coming fiscal year. How legislators around the country balance their books could guide California officials in the difficult task ahead.
At the same time, the rest of the country is waiting to see how California – the country's biggest and wealthiest state – tackles its budget crisis, said Scott Pattison, executive director of the National Association of State Budget Officers.
"What do you want your university system to do? How many people do you want to put in prison?" Pattison said. "We're going to have to ask ourselves some tough questions this year.
"California will be at the forefront of this. Other states will look to California to get a feel for how from a political standpoint you do cuts and tax increases."
So far, many states have tried the same cuts and tapped the same funding sources as they stretch shrinking revenue to cover growing costs.
Like California, 12 other states have cut public employee benefits, and 19 reduced aid to local governments.
Many states have slashed social services, mirroring proposed cuts in California. Arizona legislators stirred intense debate after cutting funds for certain state-subsidized organ transplants.
Several states have raised park fees or shut down state-funded museums. Nevada's Legislature even considered closing all of its state parks before raising user fees.
"Our typical general fund budget today is 30 percent smaller than it was three years ago," said Ken Strobeck, executive director of the Arizona League of Cities and Towns. State money makes up the second-biggest source of revenue for the state's cities. "It's had a huge effect on services."
States also raised taxes, by $24 billion in the 2010 fiscal year and $4 billion so far this year, according to the National Conference of State Legislatures.
Four states with Republican governors – Arizona, Indiana, Louisiana and New Jersey – privatized some state services to raise money.
A handful of states, California included, have sold bonds or borrowed money in other ways to cover their operating costs.
Illinois' Legislature, which is dominated by Democrats, approved this past week $4 billion in bonds to fund its public worker pension system. In 2004, California sold $15 billion in so-called economic recovery bonds to cover its debts.
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