President Reagan's speech here today was met with a subdued reaction that reflects the fiscal reality facing most of the state legislators who welcomed him as the first president to address their annual conference.
His budget cuts will catch most states with their fiscal drawers down and their voters resistant to new taxes that may be needed to finance the services Washington says it can no longer afford to subsidize.
A survey last month by the National Conference of State Legislatures found that the "general fund balances are unusually and uncomfortably low" in most states. Steven D. Gold, the staffer who reported the findings here, said 27 of 49 responding states (West Virginia was missing) said their reserve or surplus was less than 3 percent of the current general fund spending.
More than half of that group are flirting with deficits. By contrast, 10 states, most of them get energy-producers, enjoy surpluses of 10 percent or more.
Interviews with dozens of legislators here confirmed Gold's finding that, while some states are equipped to fill the breach, "the outlook is bleak" in many more for making up the 25 percent cutbacks in many federal aid programs, in a budget year when the lingering effects of the 1980 recession are coupled with fears that a new economic downtown may be under way.
"We anticipate difficult times ahead," said Assemblyman Richard Van Wagoner of New Jersey at the crowded panel discussion on budget-cutting where Gold presented his findings.
"Our surplus is $22 million," Van Wagoner said, "and we face $1 billion in federal aid reductions in the next three years. We have not made provisions for that."
A Democrat, Van Wagoner struck a partisan tone when he said that the federal budget cuts amount to a program of "shifting the shaft" to state and local officials.
Richard S. Williamson, Reagan's assistant for intergovernmental relations, conceded that "there will be certain strains" on the states, but pointed out that the federal reductions had been "embraced" by the Democratic-controlled House as well as the Republican Senate. At the state level, reaction depended more on the condition of the state's economy than on the partisanship of the legislator.
State Sen. Stanley J. Aronoff (R-Ohio), from a state suffering from the auto industry slump, described its situation as "fiscally desperate," and said that even if Ohio is able to raise taxes "there will still be program cuts."
But Corliss Mushik, the Democratic whip in the North Dakota House, said an oil-extraction tax on the state's booming energy industry had given it "plenty of money."
Her only concern, she said, is whether "the legislators will just spend it in the university or use it to pick up some of the social services the federal government is abandoning."
And Paul Hess (R), chairman of the state senate ways and means committee in Kansas, which has abundant oil and natural gas resources, said his state had "stockpiled money" in anticipation of the federal cuts and is ready to fill the gap from a $175 million surplus that amounts to about 12 percent of its normal budget.
"I couldn't sleep nights if I had my job in one of the 40 states with less than a 10 percent reserve," he said.
The legislators were told today by Republican and Democratic pollsters that they could anticipate stiff resistance to new taxes, a finding few of them challenged. William Hamilton, whose firm polls for Democrats, said that in the past complaints about federal spending and taxes have far out-distanced similar gripes aimed at state government.
"But as Reagan reduces the frustration on the federal level," he said, "folks will focus on state taxes and spending even more."
Agreeing with that judgement, Barbara Bryant, an executive with the Republican-oriented Market Opinion Research Co., said, "There is a perception that waste abounds at all levels of government."
Ohio's Arnoff, who presided at the panel where the pollsters spoke, said most legislators believe that "before you can even look at tax increases you have to cut the budget and make people believe there is a crisis. The voters have to see some blood -- state workers being laid off, parks and schools and hospitals closed -- and even then it will be tough."
A major concern of many of the legislators is the transition from categorical grants to block grants in education, health and social services recommended by Reagan and approved, in sharply restricted form, by Congress this week.
At a friefing on the block grants that drew an overflow crowd and had anxious legislators lined up outside the door, straining for information, White House and departmental officials apologized for the vagueness of some answers, saying "the ink is not dry" on the House-Senate conferees' decisions.