Declining tax revenue forces layoffs, service cuts

OKLAHOMA CITY (AP) _ Besides the issuing of writs and orders, Judge Gary Lumpkin's paperwork duties on the Oklahoma Court of Criminal Appeals include handing out pink slips to members of his staff.

Monday, October 28th 2002, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ Besides the issuing of writs and orders, Judge Gary Lumpkin's paperwork duties on the Oklahoma Court of Criminal Appeals include handing out pink slips to members of his staff.

``When the bottom drops out, it's devastating,'' said Lumpkin, who earlier this month laid off two administrative assistants, one with 20 years' experience, because of a drop in state tax revenue. He said more layoffs and unpaid furloughs are possible if revenue continues to decline.

Across the country, state governments are laying off employees and cutting services to try to close spending gaps estimated at $49 billion for the 2003 fiscal year. That is on top of a budget gap of $37 billion during the 2002 fiscal year.

The crunch is blamed on the slumping economy and the slide on Wall Street, which have led to a drop-off in revenue from personal income taxes.

A study by the Nelson A. Rockefeller Institute of Government in Albany, N.Y., found that state tax revenue for the quarter that ended June 30 fell an inflation-adjusted 13 percent from the previous year _ the most dramatic decline since the institute began keeping track in 1991.

``Everybody knew it was going to be down, it was going to be bad. But a lot of it was worse than expected,'' said Nicholas Jenny, senior policy analyst at the institute.

The budget problems _ and the hard choices involved in cutting services or raising taxes _ are likely to be at the top of the legislative agenda for lawmakers elected in next month's statehouse races.

``It's going to overshadow all the policy issues,'' said Rep. Fred Morgan, leader of the Republican minority in the Oklahoma House.

States are considering putting off highway maintenance projects, creating larger school classes and cutting public health care. Some states have already raised taxes, especially on cigarettes.

So far this year, state governments have raised taxes a total of $6.7 billion, ending seven years of net tax cuts by the states, according to the National Conference of State Legislatures in Denver.

In New Jersey, where officials face a $6 billion revenue shortfall, the tobacco tax was raised and the business tax was reworked to bring in an additional $1 billion. At the same time, state aid to schools and municipalities was reduced.

In Missouri, voters will consider a tobacco tax increase next month that would raise about $342 million a year for health care. The state is facing an $848 million shortfall.

In Virginia, state agencies have laid off or not filled 3,000 state jobs and have announced plans to lay off 1,800 more because of a $1.2 billion shortfall. College tuition increases are also under consideration.

In Texas, the state comptroller has warned lawmakers that the next state budget could be $5 billion in the red.

California's $23.6 billion shortfall has become an issue in the state's gubernatorial campaign, where Republican Bill Simon has warned Democratic Gov. Gray Davis will raise taxes by more than $10 billion if re-elected.

Oklahoma is facing a revenue shortfall of $214 million for the fiscal year that started July 1. Low oil prices have contributed to the problem in this petroleum-rich state. Health care for 70,000 poor children and elderly residents is being cut, and corrections department plans to furlough 4,850 workers without pay.

``I'm in the process of losing anywhere from $300 to $400 a month,'' said Sgt. Tim Richardson, a prison guard in Lexington. ``Between the rent, utilities and car, it doesn't leave us much left.''

Dianna Kolar, a law library supervisor at the prison, said she is considering getting a part-time job to help make ends meet. That means she will not be able to attend her daughters' high school basketball games.

``I'm one of those parents who are there for every single ballgame,'' she said. ``I'm not going to be able to go there. It's like I'm cheating them.''