Twenty-nine states (in red) will have to raise taxes and/or cut spending to balance their budgets in the upcoming fiscal year, 2009, according to a study by the Center on Budget and Policy Priorities. Size of gap is not known in two states (orange), and two others (yellow) expect a gap in FY2010. See the center's summary or six-page PDF.
Kentucky, other states pass on their fiscal pinch to pubcasters
Kentucky ETV will lose $1.8 million and up to 18 percent of its staff next year, while at least 10 other state networks suffer funding cuts of their own, as state governments share the pain of significant tax shortfalls and other effects of the country’s economic slowdown.
Broad economic challenges and specific shortcomings tied to the subprime mortgage fallout will leave at least 29 states with significant budget gaps totaling more than $49 billion for next year, according to a May report by the Center on Budget and Policy Priorities, a liberal think tank in Washington that monitors state and national budget issues.
As a result, more than half of public broadcasting’s state networks will get less state funding in fiscal year 2009 than in 2008, the National Educational Telecommunications Association estimates.
Most pubcasters will feel at least some indirect effect, since many community and university stations receive at least some state-derived funding from their license holders, says Skip Hinton, NETA president.
“It’s safe to say the financial picture, which is darkening, is going to impact public broadcasters in every state,” Hinton says. NETA provides staff services for the Organization of State Broadcasting Executives. There was no evidence that pubcasters were targeted for larger budget hits for political or ideological reasons, Hinton says.
Part of the problem is a broadly weakening economy plagued with rising energy costs, a flagging dollar and other problems. But the post-9/11 recession and earlier economic downturns generally were offset by healthy property values. Now the burst housing bubble is exacerbating the current crisis by squeezing property and sales-tax revenue, according to the center’s report.
Unlike the federal government, which regularly runs significant deficits, almost every state is required by its own laws to balance its budget. Those facing gaps generally must raise taxes, draw on reserve cash or cut funding for services.
So far, however, states have been reluctant to dip into rainy-day funds, says Elizabeth C. McNichol, senior fellow at the budget policy think tank and one of the report’s authors.
“It does appear to be raining now,” she says. “But they seem to be worried that things will get worse.”
Whether they will is hard to predict. The current budget gaps are similar to those that appeared earlier this decade, McNichol says. That downturn impacted state budgets for two years, she says.
State networks in particular will feel the pain from the resulting cuts. More than half of the system’s state nets will get less funds in 2009, according to NETA, including those in Arkansas, Alabama, Indiana, Kentucky, Louisiana, Maine, Maryland, Rhode Island and South Carolina [correction]. The New Jersey Network proposed to transform itself into an independent nonprofit after the state government planned to cut its funding by 35 percent next year (Current, May 12).
The cuts come as TV stations prepare to switch to digital broadcasting, which will lower electric bills but have unknown effects on audience size and member donations, notably in next spring’s drives, Hinton notes.
“What happens when a family’s got a third set that’s antenna-only and that happens to be the one a member of the family uses to watch doo-wop pledge?” he says.
South Carolina ETV managers expect DTV cost savings from shutting off an entire duplicate network of analog transmitters will offset its funding cut. The net will lose $415,000 in 2009, or 2.5 percent of its current appropriation, says Catherine Christman, v.p. of communications. That percentage represents the average cut for agencies in the state, she says.
Maryland PTV anticipates a smaller cut of around $100,000, says Joe Krushinsky, v.p. of institutional advancement. The network has already started using more messaging that focuses on why “every pledge counts” in live pledging and mail-outs.
Among those suffering the heaviest blows is Kentucky ETV, in part because it has strong state aid. The net’s appropriation will drop by at least $1.8 million to around $13.2 million next year, and the state government predicts a similarly deep cut again in 2010, says Craig Cornwell, programming director.
KET will offset some of the cuts by cutting up to 40 people from its staff of 220. KET laid off 10 employees last week, says Tim Bischoff, director of marketing. Another 30 staffers are eligible for early retirement during this calendar year, which the state is encouraging with incentives. Annual cost-of-living raises and health benefits are also getting trimmed, Cornwell says.
The total loss is perhaps the most significant the network has experienced, Cornwell says.
“It’s a huge budget cut, and we’re losing all these people,” he says. “They’re leaving with all this amazing institutional knowledge, and there’s nothing we can do about it.”
The network, which produces a relatively high volume of local programming, is re-evaluating that investment and most others as well. KET is “circling the wagons” to protect its education work, but for almost every other project, Cornwell says, “You’ve got to ask yourself, can we afford this again?”
Correction: Oklahoma was listed erroneously among states expecting to cut public broadcasting funding for fiscal 2009. In Oklahoma, state funding will stay at the 2008 level.
Web page posted June 12, 2008, corrected June 30, 2008
Copyright 2008 by Current LLC
