the visible hand

it is the theory which decides what can be observed – einstein

State budgets: 84.3 billion gap for 2010

Posted by ecoshift on February 8, 2009

States’ only option now is budget pain – Los Angeles Times

“With personal, sales and corporate income tax revenue plummeting, state governments — which recently trimmed their budgets to cover a cumulative $40.3-billion shortfall for the current fiscal year — are now watching in horror as a $47.4-billion gap opens for 2009.

And for fiscal year 2010, they will face a $84.3-billion hole, according to the National Conference of State Legislatures. The total shortfall through fiscal 2011 is estimated at $350 billion, according to the Center on Budget and Policy Priorities, a nonpartisan think tank in Washington.

Unlike the federal government, nearly all states must balance their budgets. So legislatures either have to raise taxes, borrow money from dwindling rainy-day funds, or cut. The last option is becoming increasingly common.

“The easy budget fixes are long gone,” Corina Eckl, fiscal program director for the National Conference of State Legislatures, said in a statement. “Only hard and unpopular options remain.”

State lawmakers can expect some relief from the federal stimulus package — but it is far from a cure-all. The version passed by the House of Representatives would cover only about 45% of the projected state deficits. A Senate version of the bill, which has yet to be approved, would, in its present form, offer even less relief.

The budget-cutting plans that have emerged from state capitols so far have a potential effect on almost everyone. Parks will close. Environmental programs will be scaled back. Bus and ferry routes will shut down, possibly sending more drivers onto clogged streets and highways. Schools may go without school nurses, and classes may become more crowded. Sick people who rely on state health programs may instead get sicker.

Washington state’s predicament illustrates the brutal reality lawmakers are facing in the hardest-hit states. Washington’s budget gap for 2010 will total 18.5% of its general fund, making it the sixth-worst situation in the nation. (Nevada is facing the most serious shortfall, with a 38% gap; California’s 22% gap is the fourth-worst, behind Arizona at 28% and New York at 24%, according to the National Conference of State Legislatures.) ”

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