Newly Elected State Legislators Grapple With Some Old Problems

Budget shortfalls, health care, and education top list of priorities

STATE legislatures in the United States are going back to the drawing board in 1993 with more ethnic diversity and more new faces - over 30 percent - than during any time in the past decade.

The new state lawmakers look different from their predecessors: There are higher numbers of African-Americans (84 more than in 1990), women (154 more), and Hispanics (21 more). Asians and American Indians also made gains, but accurate statistics on their numbers are not yet available. In party terms, there are 150 more Republican lawmakers.

These legislators are readying new ideas for the top three issues of the new year: budgets, education, and health care.

But the nation's statehouses are hamstrung by the same core problems that have troubled them for years: rapid increases in costs for Medicaid, education, and prisons, while the public rejects tax increases and the economy produces recurring budget shortfalls.

"The top issue is the same as it has been for several years ... money," says William Pound, executive director of the National Conference of State Legislatures (NCSL).

Noting that revenues for fiscal 1993 are likely to fall short of expectations in at least half the states, Mr. Pound says: "The pressure on the shrinking resources of state government is so profound that most will be in holding patterns until the economy improves." Budget problems abound

A recent, 50-state study by the NCSL shows California topping the list of states with serious budget problems. Projected shortfalls here of between $7.5 billion and $11 billion amount to as much as 25 percent of the state's general fund. Maryland is expecting a $500 million, or 8 percent, shortfall; Minnesota is looking at a 5 to 6 percent shortfall of $840 million; and Texas's $7 billion shortfall could be close to 20 percent of its general-fund budget.

Within these overall budget concerns, education policy tops the priority list of most states, says Sharon Randall, managing editor of State Legislatures magazine.

The education budget consumes almost half of state general funds on average and more than 70 percent in some states. Not surprisingly, after three years of recession, California heads the list of more than 20 states currently enmeshed in school-finance litigation.

"California has always been the benchmark in showing states how to go about [providing] quality education in state-funded schools," says Norman Luttbeg, a political science professor at Texas A&M University in College Park, Texas. "With California in the position of pulling back on that standard, you are likely to see other states drawing back as well."

To avoid that, several states are likely to adopt comprehensive reforms this year, including Colorado, Iowa, Idaho, North Carolina, Ohio, Pennsylvania, and Washington. A bipartisan Alabama plan will require legislative approval and a statewide referendum. Illinois, Ohio, and Washington State have appointed special commissions, task forces, or interim committees on education.

But state supreme courts have shot down some ideas in recent years, Professor Luttbeg adds. The Texas Supreme Court, for example, recently declared the state's attempt to underwrite education funding with property taxes unconstitutional.

"The Legislature seems unlikely to move toward personal income tax," Luttbeg says. "So heaven only knows what they will try next."

Access to medical care, as well as the reform and cost containment of Medicaid and Medicare, are among the top three priorities in all 50 states. They are the top priority in one-third of the states, according to NCSL.

In responding to NCSL's 1993 survey, leaders of seven states - California, Connecticut, Indiana, Maine, Missouri, West Virginia, and Wisconsin - said the federal government must pick up the ball on health care.

"States are singing the mandate blues," says George Edwards, a political science professor at Texas A&M. He notes that costs for Medicaid and other health care have been increasing about 12 percent a year for three to five years.

All eyes, Professor Edwards says, now focus on President-elect Clinton, who has promised to unveil health-reform proposals in the first 100 days of his presidency.

"Whatever Clinton decides to do at a national level will have direct implications for what the states do," Edwards says. `Managed competition'

One approach expected to get special scrutiny this year is a so-called "managed competition" in which states band employers and the unemployed into large health-insurance networks to improve health-care purchasing power.

Colorado is examining one such plan that would help pressure doctors, hospitals, and health-maintenance organizations to compete on price and quality to win business. Legislation combining this idea with a public subsidy may be introduced in Illinois, Massachusetts, and New York.

Beyond their three top concerns of budget, education, and health care, more states this year are looking at ways to streamline government, reduce overlapping state and federal programs, and produce both short- and long-term stimulus packages.

Michigan and California are among those states looking at reducing taxes and regulatory obstacles that drive residents and businesses out of state.

For the moment, state leaders say they are in a holding pattern until more is known about Mr. Clinton's proposals for the US economy.

"If Clinton decides to cut spending, that will directly influence every state because a large part of the federal budget consists of grants to states," says Jack Pitney, a political scientist at Claremont McKenna College in Claremont, Calif. "If he tries such things as raising taxes, it will be harder for states to raise their own taxes on top."

The new year also signals a new era for the 15 states which imposed terms limits on congressional representatives or state legislators in the November election. In California, for example, more than one-third of the new state Assembly members are the first to be elected under six-year term limits.

"They are simply not going to have the time to find the same partisan battle lines," says Daniel Schnur, chief of communications for Gov. Pete Wilson (R).

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