For 30 years we have witnessed a downward spiral of eroding public trust in government. While the federal government deals with the most momentous issues -- national security, health reform, global climate change -- state government has borne the brunt of a self-deepening tax revolt.
The fiscal noose imposed by tax and spending caps, now exacerbated by the recession, undermines states' ability to raise necessary revenues. The process erodes state governments' basic capacity to operate effectively -- which further destroys public trust. This vicious circle diminishes the willingness of Americans to entrust government at any level with tackling challenges that call for decisive action or for planning and investment in the future.
As revenue collections decline due to the recession, states raise taxes or cut services to balance budgets. In hard times, reductions in public services are not only cruel but counterproductive -- in a recession the economy requires not less but more public spending.
In the current crisis, government agencies cope by reducing staff, cutting hours of operation, closing local offices, increasing hurdles for service eligibility, and raising standards for what constitutes emergencies worthy of intervention. As they decimate university systems, health-care programs, public-education funding, and other essential services, the agencies reinforce the belief that states are incompetent.
The federal stimulus program enacted last year helped the states but made up only 30 percent to 40 percent of their budget shortfalls. A second round of federal support is far from certain. As this special report demonstrates, without further federal assistance, the prospect for the states is grim.
For the most part, states are where policies become visible and people experience public programs directly. Frontline public services forge popular expectations of government. For example, state actions will determine the success of national health-care reform and will influence public opinion on the legitimacy of federal efforts to restore economic prosperity.
Yet few Americans grasp what state governments do, how they contribute to our country's well-being, and how our federal system actually works. For instance, we educate our children through local governments required to meet state standards and aided with state and federal funds. If they attend college, most Americans receive higher education through state colleges and universities, which are financed with state funds; these costs are often supplemented through federal grants and student aid. Many of the critical programs that provide for people in need, particularly in hard times -- Medicaid for low-income and disabled people, unemployment insurance, and the Temporary Assistance for Needy Families program -- are state partnerships with the federal government.
Many might be surprised that the work force of state and local governments exceeds federal employment. At the last census (2002), 12.1 million people worked for the federal government, including military personnel and post-office workers, but 15.6 million worked for state and local governments.
As our research at De¯mos reveals, too many people now see government only as polarized politics or as an undifferentiated, ineffective bureaucracy. The public has lost touch with the ways the quality of life of communities depends on government. People have lost track of government's role in long-term planning and as steward of schools, roads, police services, and other essential public facilities. Constructive responses to the fiscal crisis, if they are to emerge, will require reconstituting an understanding of the critical role of government and support for the public purposes it embodies.
The fiscal troubles of the states are unfolding in the context of a deeply embedded public distrust of government that has been engendered over decades by individuals actively hostile to government and by organizations that promote a small government, low-tax ideology. This past year the backlash against the bailout of financial institutions, the rejection of a public option in health-care reform, and the emergence of passionate "tea party" protests all bore witness to this distrust. At the state level, the manifestations were rampant. In the midst of the worst state fiscal crisis in decades, some state governors even found it politically expedient to refuse emergency federal-assistance funds in perverse appeals to anti-government sentiment.
Public-opinion polling confirms that trust in state government is related to its ongoing capacity to manage state affairs. According to the Gallup organization, in the 1990s, about two-thirds of Americans had at least a fair degree of confidence in their state's ability to handle state problems. By the downturn of 2003, the last time states cut services drastically, this figure dipped to barely half. In 2009, public trust fell again, as all but two states experienced significant budget shortfalls
This cycle of public distrust and government contraction can be broken. At stake is the viability of all levels of government in a time when effective and adequately resourced public structures are as crucial as ever. Over the last five years, De¯mos has sponsored research and engaged with state partners in extensive field work across the country to develop strategies to break this cycle. This work suggests several steps that can begin to create a more constructive climate.
First, elected and appointed officials, as well as prominent civic and nonprofit leaders, need to promote a positive view of the mission and purpose of the public sector and offer a vision of the government to which we should aspire. For example, in his speech to Congress on health-insurance reform, President Barack Obama modeled a balanced approach that recognized government's necessary role: "Our predecessors understood ... that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, the vulnerable can be exploited." At every opportunity, we must make visible the essential roles that government is uniquely positioned to fulfill and which cannot be adequately undertaken by individuals or by private institutions.
Second, leaders can help citizens understand public systems and structures and the taxes that support them as necessary means to achieve the common good. Years of conservative rhetoric have ingrained in our national psyche the idea that the public good is best served by the dogged pursuit of private interest and that taxes merely deprive individuals and companies of their own money. While campaigning successfully to be governor of Massachusetts, Deval Patrick turned an opponent's demand to "give back" taxpayers' money into an appeal to people's innate sense of community. "It is their money," he declared during a debate, "but it's also their broken road. And it's their overcrowded school. It's their broken neighborhood and broken neighbor. ... It's not this idea that people earn what they earn and have no responsibility for the Commonwealth. We have a responsibility, in addition to personal responsibility, to take charge of shared responsibility."
Third, in seeking public support for government initiatives, we can rekindle Americans' sense of citizenship and community. As a practical matter, this approach broadens the constituency for the initiative. In Wisconsin, advocates canvassing for a local tax measure realized in the midst of their campaign that they were not making headway and switched tactics to talk with voters about quality of life and the need to come together for the good of their community. In winning a surprising victory, they attributed success to the increased receptivity of voters to this new approach. Similar stories are told by leaders in other states, including those in Massachusetts and North Carolina.
Finally, it's possible to cultivate public confidence that government can be a mechanism for pragmatic problem-solving to achieve a secure and prosperous future. Our research indicates that when this image is evoked, Americans are much more likely to have a constructive view of government and are more inclined to support specific progressive policies. Candidates and organizations whose policy goals require state revenues and depend upon effective government action should offer an aspirational picture of how adequately funded and competently managed public systems can serve people's needs.
The state fiscal crisis is the front line of this struggle. State governments, no less than the banking system, are too important to fail. States' ability to weather the fiscal storms, while also cultivating support for their public missions and the revenues necessary to fund them, will either help redeem the case for the role of government -- or further undermine support for the public sector.