Fiscal picture for programs, salaries and benefits 

In the December/January issue of Advocate, Marcia Howard, executive director of Federal Funds Information for States (www.ffis.org), warned that President Bush's proposed federal spending on discretionary grants for fiscal year 2008 was bad news for state budgets. Nearly 30 percent of all state spending is funded through federal grants.
Since that report, Congress enacted the fiscal year 2008 omnibus spending bill, which was signed by President Bush in late December.

"States came out better with the omnibus bill than they had any reason to hope they would from the regular budget process," says Howard. "Funding for some important programs was boosted above the president's request. Some programs he wanted to eliminate survived. By our calculation, states ended up with a 4 percent increase, not adjusted for inflation, in discretionary grants overall."

Title I and the Community Development Block Grant did well, Howard says. Department of Justice grant programs took a 15 percent cut, but the reduction would have been more severe had President Bush had his way. Funding for Department of Labor programs, including the Workforce Investment Act, is $38 million less than in FY 2007. President Bush had proposed a $261 million reduction for these programs.

In related budget news, two dozen states are projecting revenue shortfalls for FY 2009 and beyond, according to the Center on Budget and Policy Priorities
(www.cbpp.org).

Illinois, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York and Rhode Island are among the states with projected shortfalls in FY 2009. Analysts project budget gaps in Connecticut in FY 2010.

Without legislative action to raise revenues, government employees should brace for difficult times at the negotiating table and in the legislative arena in all financial areas-funding for public services and workers' salaries and benefits.