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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

States on the Brink

It hasn’t gotten much attention in self-absorbed Washington, but the continuing budget struggles of state governments in much of the country aren’t getting any better. Abby Goodnough of The New York Times has the sad details:

With state revenues in a free fall and the economy choked by the worst recession in 60 years, governors and legislatures are approving program cuts, layoffs and, to a smaller degree, tax increases that were previously unthinkable.
All but four states must have new budgets in place less than two weeks from now — by July 1, the start of their fiscal year. But most are already predicting shortfalls as tax collections shrink, unemployment rises and the stock market remains in turmoil.
“These are some of the worst numbers we have ever seen,” said Scott D. Pattison, executive director of the National Association of State Budget Officers, adding that the federal stimulus money that began flowing this spring was the only thing preventing widespread paralysis, particularly in the areas of education and health care. “If we didn’t have those funds, I think we’d have an incredible number of states just really unsure of how they were going to get a new budget out.”

Voters ought to be asking the congressional Republicans who almost unanimously voted against the stimulus legislation about that.
But in the meantime, the worst may lie ahead, as Pamela Prah of Stateliine.org explains:

While 2009 is bad, states worry 2010 and beyond will be even worse. Even if the national recession ends this year as many predict, the outlook for states is bleak. State fiscal conditions historically lag behind national economic recovery. The year after a recession ends is typically when state budgets are hit hardest, because by then, Medicaid rolls have swelled with the higher numbers of the unemployed who have lost their health insurance.

In April the National Conference of State Legislatures estimated that aggregate state budget shortfalls for fiscal year 2010 would reach $121 billion.
You should read the New York Times piece for examples of where the states are cutting or threatening to cut services, from Arnold Schwarzenegger’s suggestion that California’s entire public assistance program be shut down, to the poignant decision in Illinois to stop paying for about 10,000 funerals for poor people. We’re going to be hearing a lot more of these type of stories in the immediate future, and at some point, they should get some serious attention in Washington.

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