States face new trials in 2004 on money, education

Still struggling with money worries, state lawmakers head back to work to deal with some tricky problems -- Medicaid cuts, higher education funding, and whether to allow more gambling among them.

Finding solutions will be tough, and made that much harder by lawmakers keeping one eye on fall elections.

Some states -- especially in the manufacturing-heavy Midwest -- are struggling with the same economic difficulties that saw higher taxes and widespread cuts the last three years.

Though Michigan resolved a $2.5 billion deficit last year, it could be as much as $900 million short again this year. South Carolina, Maryland, Georgia and California are among other states already seeing cash problems emerge.

Unrealistic hopes

Legislators in states where the economy is improving, meanwhile, can face unrealistic hopes. "There's clearly a couple of years worth of pent-up demand," said Greg Patterson, spokesman for Delaware Gov. Ruth Ann Minner. "It's not a license to go and start on a spending spree."

With health care driving a big share of government costs, states continue to target Medicaid, the joint state-federal health insurance program for the poor.

New Mexico is looking at lowering Medicaid payments to doctors and cutting back services, while Tennessee Gov. Phil Bredesen has promised a major overhaul.

Oklahoma Gov. Brad Henry, however, wants a new program to insure people that Medicaid doesn't cover.

And prescription drugs, particularly the draw of cheaper drugs in Canada, is a pressing issue for many states, including Illinois and Minnesota.

Several states are turning to gambling to solve budget problems, with Delaware, Maryland, Iowa and Oklahoma all considering games of chance that range from slot machines to river casinos.

But this year's debates won't be only about money.

Cutting scholarships

Education remains a top concern in many states. Georgia is looking at tightening requirements on its almost-too-popular college scholarship program, while Colorado is discussing consolidating functions at its colleges.

Maryland is hoping to slow the growth in tuition. Washington is working on a major funding overhaul for K-12 and higher education.

New York and Florida are both struggling to meet orders -- from courts or initiatives -- that demand more spending on K-12 education.

Ethics for public officials are up for debate in several states after recent scandals, including New Jersey, where five lawmakers lost election after they were criticized for hiring family members as aides.

In Wisconsin, where an earlier scandal about campaigning by legislative staffers created a huge stir and a ban on such work, some legislators want to undo some of the changes.

Separating campaign politics from policy is "like trying to take the white out of your teeth," said Wisconsin state Rep. Marlin Schneider. "This is a political building. That's what we do here." His bill would leave the ban on raising campaign cash on state time.

And in Connecticut, legislators and the statewide political community are wrestling with Gov. John Rowland's revelation that he accepted gifts from state contractors. Rowland has rejected calls for his resignation, and said his office did not influence the awarding of any contracts.

Between money worries and elections, the year promises new challenges.

New York legislators overcame gubernatorial vetoes and political differences to patch together a budget during the last difficult session. And will 2004 be worse? Assembly Speaker Sheldon Silver pondered that question and said: "It's always a contentious year."