State of the states? Broke and going broker: "As of December, the National Conference of State Legislatures fiscal survey found: “Thirty-six states already report another round of gaps since FY 2010 began. The total now hit $28.2 billion, and the fiscal year for most states doesn’t end until June.” They already are in the hole despite raising taxes, cutting spending, squandering “rainy day” funds and using federal debt and accounting tricks to close $146 billion in cumulative budget gaps.
Those shortfalls pale against the lurid reality of unfunded promises to retirees, deferred public works projects and years of accounting tricks hiding true deficits.
Compounding all that is the fact that $248 billion in federal American Recovery and Reinvestment Act funds stop Dec. 31, halfway through most states’ fiscal years."
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Remember how the housing market was obviously going to crash, and a few people were predicting it but the mainstream media didn't bother to cover it until it happened? Well, now a few people are saying that most of the states are in major financial trouble. And what do the media giants have to say about it? Very little. They talk about their own states finances, but not the bigger picture, which is that most of the state governments will have to radically raise taxes or radically cut spending in the next 12 months.
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The governor of the nation's biggest state is pursuing a different tack: more federal dollars to even out the amount the state receives for each federal tax dollar paid. So far that's not gaining much traction for fear if California gets the money, then the other states will line up for their share.
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