BOSTON — Facing massive budget gaps caused by three years of economic problems, many states are preparing to make deep cuts in funding for public education, according to a somber report issued here Thursday.

School financing traditionally was seen as too sacred to slash, the report from the National Conference of State Legislatures noted.

But with huge shortfalls projected, almost half of the states are discussing serious cuts in funding for K-12 education, as well as significant reductions in funds for higher education, the report found.

"If you consider that K-12 education, which had been held sacred in the past, is being cut even as we speak, that's a real indicator of how severe these budget shortfalls have been," Corinna Eckl, director of the fiscal affairs program, said Thursday at the organization's spring forum.

The changes under discussion in many states likely would drop per pupil spending and increase class size, said Arturo Perez, a fiscal analyst at the group's headquarters in Denver.

"When you talk about problems the states are facing, 1 out of every 3 state expenditure dollars flows to education," Perez said in an interview Thursday.

"The level of budget gaps that the states are facing requires that they take a look at incorporating K-12 spending into their solutions," he said.

Perez pointed out that higher education "was on the chopping block" for states last year, and remains vulnerable as states engage in financial triage.

Several states are operating without budgets, Perez said. Idaho's legislative budget session has continued for a record time, he said, and the Legislature in Arkansas is likely to be recalled to resume its incomplete budget session.

Most state fiscal years conclude June 30. With only weeks left to repair tattered budgets, more than half of the states still have deficits.

Two-thirds of states say they are outspending their already pared-down plans, the report disclosed.

In such tough financial times, "there is no area of the state budget that is going to be shielded or off-limits," said the group's president, Oklahoma state Sen. Angela Monson.

Tuition hikes are a likely vehicle to offset higher education costs, the report said.

More than half of the states also expect to trim Medicaid costs, and 19 states plan to trim prison budgets.

More than one-third of the states are examining increases in fees, including hikes in cigarette, liquor, sales and personal income taxes. Six states have raised cigarette taxes so far this year, and two have raised beer taxes.

"Most states thought they would be on more solid footing at this point in time," Eckl said. "And they're really not."

Associated Press contributed to this report.

Copyright 2003 Los Angeles Times

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