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CU System
States grapple with budgets CUs told Stay vigilant
MADISON, Wis. (2/3/09)--State governments' budgets are in distress, which means credit unions will be staying vigilant on measures their states may consider in providing relief, according to several leagues. About 46 states are facing budget shortfalls this year, and leagues have the job of not only monitoring the credit union-specific legislation, but also what their states are doing to plug up the shortfalls. California, the world's eighth largest economy, has made headlines with its budget problems, stemming from a $15 billion deficit--roughly more than 35% of its general fund--and a $346 million shortfall this month, necessitating delays in state tax refunds, payments to contractors and disbursements to counties and agencies that provide social services (CNNMoney.com Jan. 31) . Wisconsin's budget has a $5.7 billion short fall--the largest in the state's history-- created by the economic crisis, according to Gov. Jim Doyle (Wisconsin State Journal Feb. 1). The budget was the topic of a panel discussion at the Wisconsin Credit Union League's 2009 State Government Affairs Conference in January. During the session, it was revealed that Wisconsin may receive $2.5 billion to help pay for health care and education from the federal economic stimulus package. "Now is a very volatile time for Wisconsin credit unions as banks vow to continue their pursuit of CRA-like legislation to be imposed on credit unions or new taxation of credit unions in light of state budget deficits," said the league in introducing its Wisconsin Credit Unions 2008 Annual Report (The League News Jan. 29). Pennsylvania has a deficit estimated between $1.6 billion and $4.1 billion (Life is a Highway Jan. 16), and Gov. Edward Rendell is set to unveil his budget today. Solutions offered by the House Democratic Caucus include using the rainy day fund, a federal fiscal stimulus, increased efficiencies, program cuts, and tax or fee increases. Pennsylvania Credit Union Association governmental affairs staff, attended a session recently conducted by members of the General Assembly to monitor suggestions from community leaders, residents, regarding the budget. In North Carolina, as the legislative session begins, the league and credit unions participated in several events that kicked off "what will surely be an interesting legislative long session," said the North Carolina Credit Union League (Weekly Update Jan. 29). To one function newly elected Gov. Beverly Perdue talked about her plans to work with state legislature to get that state's economy on track. In Missouri, Gov. Jay Nixon outlined five initiatives for the state this year. Of most concern to credit unions, said the Missouri Credit Union Association (MCUA), are the fiscal responsibility, and transparent and accountable government initiatives. Nixon reported a shortfall in fiscal year 2009 of more than a quarter billion dollars. His initiatives include cutting 50 programs, eliminating more than 1,300 positions, cutting $200 million from overhead by position elimination and cutting bureaucracy, getting tough on tax credit programs, and setting up an Economic Stimulus Council. "Credit unions will need to remain vigilant--and keep building relationships with legislators. We do not want one of the cost-saving actions to affect our independent state regulator," said MCUA (The Missouri difference Jan. 30).


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