Beebe: ‘Hurt’ for states expected in budget deal

LITTLE ROCK — Whatever Congress and the president do to avoid the fiscal cliff, states are going to be hurt, Gov. Mike Beebe said Wednesday, a day after he and five other governors met with President Obama at the White House to discuss the looming fiscal deadline.

But Beebe said the nation could risk plunging into a new recession if it goes over the cliff.

Beebe told reporters at the state Capitol, “Our emphasis was, ‘We recognize it’s going to hurt us, whatever your solution is, and we’re willing to try to work with you and deal with that in the ways that are the least harmful, without any specifics in that regard. But don’t disproportionately hurt the states. Don’t make the states pay the lion’s share of whatever this medicine is that we’ve all got to swallow.’”

He declined to name any specific areas of the state budget where he was willing to make sacrifices to help resolve the federal budget crisis.

Beebe also said the governors, who were evenly divided between Democrats and Republicans, urged Obama to consider relieving states of obligations they may be unable to meet under federal spending cuts implemented to avoid the fiscal cliff.

“If it’s cut in program X and program Y, does that relieve the states of the obligation to provide the same level of services under that program X and program Y that the feds made us do before?” he said.

The fiscal cliff is a series of automatic federal spending cuts and tax increases that will take effect Jan. 1 if no budget agreement is reached. Beebe called the automatic cuts and tax increases “drastic” and said they could have serious consequences, both immediately and in the long run.

“You’ve got the immediate fiscal impact both in revenue and in cuts, but then you’ve got the separate issue of the long-term effect on the economy and whether or not you’re going to invoke, in effect, another recession,” he said.

State finance officials have estimated that the automatic cuts would cost Arkansas $54.9 million in federal funding, ranging from an $11.9 million cut in Title 1 grants, which are used to improve academic performance in school districts with high percentages of low-income families, to a $38,000 cut to the State Criminal Alien Assistance Program, which helps states with the expense of incarcerating undocumented immigrants who are arrested for criminal activity in the state.

Among other projected cuts:

• $8.6 million in special education grants to schools.

• $5.8 million for Head Start, an early childhood education program for children from low-income families.

• $5.3 million for the Women, Infants and Children program, which provides food, health care referrals and nutritional education to low-income mothers and children.

• $2.2 million for the Low-Income Home Energy Assistance Program.

• $2.2 million for the Child Care and Development Block Grant Program.

• $2 million for state administration of the Unemployment Insurance Program.