Scaling Back State Programs Is Least of Three Fiscal Evils

PRINCETON, NJ -- As Wisconsin and numerous other states struggle to reduce untenable budget deficits, a new USA Today/Gallup poll finds that not one of three major fiscal strategies available to state lawmakers is very popular. The least objectionable to Americans is "reducing or eliminating certain state programs," with about equal numbers in favor as opposed. A slight majority, 53%, opposes reducing pay and benefits for state workers, and a larger majority, 71%, opposes raising state taxes.

Americans' general opposition to these options comes despite the widespread belief that states are in fiscal trouble. About two-thirds of Americans (64%) perceive their own state is facing a budget crisis based on what they have read or heard, though 31% are unsure. Five percent say their state is not in crisis.

Additionally, the new poll finds Americans opposed to their own state adopting a deficit-reduction proposal, like the one that has triggered a legislative standoff in Wisconsin, that eliminates some of the collective bargaining rights of most public unions, including the teachers' union. One-third of Americans say they would favor such a bill in their own state, while 61% would oppose it.

As state budgets are hammered out across the country, leaders may find it more difficult to find solutions that are acceptable to rank-and-file Democrats than to Republicans. That's because majorities of Democrats (approximately 6 in 10) oppose each of the three main strategies tested for reducing deficits. By contrast, more than three-fourths of Republicans (78%) oppose raising taxes, but majorities favor eliminating or reducing certain state programs (65%) and reducing worker pay and benefits (51%).

Independents show solid opposition to tax increases, but are about evenly divided in their reactions to reductions in state programs and worker pay.

State employees have emerged as the focal point of Republicans' deficit-reduction proposals in Wisconsin. The new poll broadly suggests that Americans are not anxious to see state workers take the brunt of the pain -- either in terms of reducing their pay or eliminating their collective bargaining rights. At the same time, Americans are evenly divided over whether state worker unions are generally more helpful or more harmful to their states. Underscoring the divisive nature of this issue, two-thirds of Democrats consider unions helpful, while two-thirds of Republicans call them harmful.

Bottom Line

As long as state governments can't print money, and their debt ratios are too high to continue borrowing, state lawmakers will be forced to consider raising taxes, cutting state programs, and reducing worker costs as three primary ways to balance their books. Americans don't love any of these choices, but cutting programs garners the least opposition, mainly because a solid majority of Republicans favor it. Raising taxes is the most unpopular, and is opposed by majorities of all party groups. Crafting budget policies that affect state workers may be especially difficult. The public isn't eager to see these fellow residents lose pay and benefits or union rights, but they aren't convinced unions are good for states either.

One aspect of public opinion on state employees not tested in the poll is whether Americans would rather see reduced pay and benefits for state workers or state program cuts that lead to major layoffs. This seems to be where the showdown in Wisconsin is heading, and may preview how budget battles will soon play out in state capitols across the country.