Courts Upend Budgets as States Look for Savings

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State budget battles — usually between governors and legislatures — are increasingly involving another branch of government, the judiciary. In recent weeks, court decisions have upended budget negotiations in California, Nevada and New Jersey, and more cases are pending in other states.

Many of the recent decisions are the direct result of the economic downturn. The courts are finding that many struggling states are not meeting their responsibilities as they strive to save money. And because many states have been forced to close budget gaps year after year, these decisions are having an outsized impact, and intensifying fiscal pressures.

In Nevada, for example, a court decision last month that the state had illegally used local revenue to balance its last budget opened a big deficit in its coming budget. That led the state’s new Republican governor, Brian Sandoval, to break a campaign pledge and agree to extend more than $600 million worth of taxes that had been set to expire. The State Senate approved extending those taxes on Monday.

The courts have also delivered stinging rebukes to some states, finding that they sometimes broke the law in their efforts to cut spending and find new sources of revenue to cope with the aftermath of the Great Recession. The courts said their measures illegally hurt local governments, poor schoolchildren and prisoners.

http://www.nytimes.com/2011/06/07/us/07budgets.html?nl=todaysheadlines&emc=tha23