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The Fiscal Crisis of the States: Lessons for the Future.

The Fiscal Crisis of the States: Lessons for the Future edited by Steven D. Gold, Georgetown University Press, Washington, D.C., 1995. 396 pages, $42 hardcover, $19.95 softcover.

Apart from a turnover of party control nothing enlivens a statehouse like a fiscal crisis. And while party revolution is likely, to involve as much undoing as innovation fiscal crises are likely to see programs pruned or axed, accumulated proposals for fiscal reform dusted off, privatization taken seriously, personnel policy shaken up, state-local relations reconsidered and long-term employees invited to retire. A state fiscal crisis has historically been the most likely way to start a general cleaning of state government.

This new book looks at the question of whether all this moving and shaking actually gets rid of cobwebs or only shifts the dust. Gold, well-known to many readers of State Legislatures as an authority on state finances, invited six scholars to report on the progress and resolution of the fiscal crises of the early 1990s in six states -- California, Connecticut, Florida, Massachusetts, Michigan and Minnesota. He and Sarah Ritchie, both at the Center for the Study of the States in Albany, N.Y., when the book was written, have added several interpretive chapters. Gold is now with the Urban Institute Washington, D.C.

These chapters are important reading for all legislators and staff who are concerned with budgets. They provide a level of detail about state actions that is unavailable from other sources. The best parts of the book are Gold's introductory chapters on state issues, problems, strategies and policy changes in the face of fiscal crisis, and his concluding survey of what the six state case studies show. These provides as good a discussion of state responses to fiscal crisis as could be written in the space that Gold has allowed himself.

The case studies are likely to be of more limited appeal, not for any lack of careful research but from the burden of detail. It is hard for all but a few people in the United States to get very interested in the details of politics in another state. The authors of the case studies clearly had been instructed to focus on analysis, draw conclusions that would be useful to readers nationally, and point up the lessons that Massachusetts or California, for example, have for the other 49 states. Unfortunately the authors let thorough presentation of what happened get in the way of what it means.

More troublesome is the inability of the authors of the case studies to see more going on than elected officials' strategies to re-election. fail to take note of responsible state officials trying in difficult circumstances to solve dilemmas of public policy. The case studies at times reveal a condescending attitude that is conducive to a clear understanding of state politics. A reader is sometimes tempted to think that the authors of all the case studies agree with the one who says, "many politicians and state and local officials are slow learners."

Such an interpretation of individual state political responses to fiscal crisis is limited and undiscerning. Gold himself points out (as he has in many previous publications) that the national economy, which is not under the control of state officials, "is the most important influence on state fiscal conditions." He also points out, under the heading of "Lessons for the Future," that state responses to fiscal crises included flexibility, policy innovation, reform, and astute use of state rainy-day funds, and local and federal resources. All this occurred, as the book demonstrates, within a framework of voters' understandable reluctance to see taxes increase and at a time of growing cynicism about government's ability to solve any problem at all. For slow learners, state officials seem to have coped remarkably well.

What these case studies lack is a sense that governors' and legislators' responses to crises have to balance interest against interest, outcome against outcome, program against program. The California case study identifies winners and losers in very clear-cut terms, missing the point that crisis management is really about mitigating losses and toning down wins. An understanding that no state fiscal crisis is ever exactly resolved, any more than any political issue is, and that event shades into event without clear resolution would have let the authors of the case studies this book write more perceptively of the difficulties and partial victories with which elected officials respond to crises that are outside their control.
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Author:Snell, Ronald K.
Publication:State Legislatures
Article Type:Book Review
Date:Feb 1, 1996
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