Sunday, July 25, 2010

The 18 States Facing The Most Brutal Austerity Cuts

The 18 States Facing The Most Brutal Austerity Cuts
They have Illinois as the third worst, exceeded only by New Jersey and Nevada. I hear the talking heads referring to the "recovery" we are supposedly in, and then I look at the condition of state and local governments and think, "no way, baby."


Fred Pilot said...

Any significant increase in tax revenues won't come until economic activity has been strong and sustained over a period of time. Bottom line, the states are going to struggle for some time.

Anonymous said...

I think the idea that the economy recovers and then state and local revenues bounce back may no longer apply. I don't think there has ever been a time when so many states were so far in the hole. Same with dozens of major and mid-sized cities, thousands of school districts and other special districts. People keep comparing this to the Great Depression, but remember that state and local governments did much, much, less back then. Their budgets were a far smaller part of the economy and they employed far fewer people. They didn't tax at such high levels. These budget imbalances mean layoffs and tax increases on a major scale. That, in turn, means the overall economy will continue to suffer.

I don't see how the economy can sustain a recovery unless and until these state and local budgets are somehow put back in order. And to me, the problem is not temporary or cyclical--it is structural.

All we hear about to fix things is attacking public employee unions and cutting public employee pensions. This is scapegoating. Any real fixes would require major reconsideration of what states and local governments should be doing. For example, I think the first thing that would have to be done to get the states out of their budget hole is a drastic curtailment of unfunded federal mandates in health, education, social welfare, and environmental policy. I am not questioning the "goodness" of these policies--I'm just saying that if Congress wants these things done, they should pay for them.

Evan McKenzie said...

That previous comment was from me, by the way--I'm not trying to be anonymous on my own blog!