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States Cut Services to Compensate for Budget Shortfalls, CBPP Reports

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States Cut Services to Compensate for Budget Shortfalls, CBPP Reports

April 18, 2012

On April 18, the Center on Budget and Policy Priorities released an analysis of states' budgets and spending over the past five years.


CBPP found that states with budget shortfalls tapped "rainy day" reserves and increased federal funding to fill the gap, but still found it necessary to cut services under programs such as Medicaid. On average, states enacted spending cuts of $3 for every $1 in new revenue generated.


The American Recovery and Reinvestment Act of 2009 provided nearly $140 billion to states, much of it dedicated to increased Medicaid funding. While these measures helped to lessen the extent of harm caused by the deep spending cuts, the report notes that states are still providing services at levels lower than those pre-recession.