States: We're broke like a muthaf***a

[marmar]

from the NY Times:



Facing Deficits, States Get Out Sharper Knives

By JENNIFER STEINHAUER
Published: November 16, 2008


LOS ANGELES — Two short months ago lawmakers in California struggled to close a $15 billion hole in the state budget. It was among the biggest deficits in state history. Now the state faces an additional $11 billion shortfall and may be unable to pay its bills this spring.

The astonishing decline in revenues is without modern precedent here, but California is hardly alone. A majority of states — many with budgets already full of deep cuts and dependent on raiding rainy-day funds or tax increases — are scrambling to find ways to get through the rest of the year without hacking apart vital services or raising taxes.

Some governors, including Arnold Schwarzenegger in California and David A. Paterson in New York, have called special legislative sessions to deal with the crisis.

Others are demanding hiring freezes and across-the-board cuts. A few states are finding their unemployment insurance funds running dry, just as the ranks of out-of-work residents spike.

The plunging revenues — the result of an unusual assemblage of personal, sales, capital gains and corporate taxes falling significantly — have poked holes in budgets that are just weeks and months old and that came about only after difficult legislative sessions.

“The fiscal landscape,” said H. D. Palmer, a spokesman for the California Department of Finance, “is fundamentally altered from where it was six weeks ago.”

In Michigan, to reduce overtime costs, fewer streets will be salted this winter. In Ohio, where the unemployment rate is above 7 percent, the state may need a federal loan for the first time in 26 years to cover unemployment costs. In Nevada, which is almost totally dependent on sales taxes and gambling revenues, a health administrator said the state may be unable to pay claims in a few months. .........(more)

The complete piece is at: http://www.nytimes.com/2008/11/17/us/17fiscal.html?_r=1

[Lex1775]

1. A lot of toes are probably going to get stepped on...

But the States need to start cutting back on services that are "non-essential"... which usually includes a lot of stuff that interest groups tend to stump for.

[marmar]

2. Such as?

n/t

[Lex1775]

5. I have no idea.

I'd imagine it varies state to state. AZ is running a deficet right now and we're throwing tons of money away on a light rail system in downtown Phoenix that has been one budget disaster after another. There was also talk of disbanding the Maricopa County (Phoenix metro and outlying area) Enivornmental Agency since the EPA has offices in town that do the same thing.

[mrreowwr_kittty]

7. The light rail is funded by a sales tax.

It was approved by the voters in 2004. As far as I'm aware not a single penny for it is coming out of the State Budget. Getting rid of the light rail (not exactly doable since it's scheduled to start running next month) would not put any money back in the state treasury.

[Lex1775]

10. Yes, but that money could be put to better use.

There is already talk that the fares to ride the light rail will be doubled before it is even opened because of the budget problems.

[mrreowwr_kittty]

15. The voters would have to approve the money to be used for other things.

You can't just arbitrarily take taxes that are reserved for one thing and put them toward something else (though the AZ lege tries to do it all the time and gets their fingers smacked for it). It took a ballot initiative to get the light rail. If you don't like it start your own ballot initiative to undo it or to raise taxes for something else.

The reason Arizona is broke is because of nearly 40 years of Republican rule. Draconian tax cuts, combined with the idiotic Constitutional requirement for a balanced budget have led to the current situation. It happened long before the light rail. And let's face it, if Phoenix wants to be remotely competitive with other cities the least we can do is develop some public transit.

[Pakhet]

18. they're going to get the light rail up and running

only to reduce the number of regular commuter bus routes.

[hfojvt]

6. you know, things like libraries and museums, theatre and music programs

non-essential intelleckual stuff.

[mrreowwr_kittty]

9. Shit, you're being a pushover. Cut police and fire too.

Get yourself a hose and a gun! Do-It-Youself public safety!

[hfojvt]

3. does this mean I get to say "I TOLD YOU SO!"?

Way back when I said that the economic stimulus package should have included aid to the states instead of, or in addition to, those stupid rebate checks.

But nooooo, Nancy Pelosi "compromised" with the Republicans by doing it their way.

States, too, should be increasing taxes instead of cutting jobs and services. A 1% tax surcharge on incomes over $100,000 would raise $184 million in Kansas. State taxes, as a rule, are not progressive enough. But Republicans in the legislature will fight to the death to prevent a tax increase on the wealthy.

[zbdent]

4. how about, for every $1 that a state puts in in Fed tax, they get $1 out?

Of course, that would piss off a LOT of red states, who get more than they put in ...

[hfojvt]

8. it would also be anti-progressive

since presumable wealthier states are assisting poorer states, and some things, like the number of social security recipients living in a state are not really negotiable.

[zbdent]

11. hey, if all those snowbirds wanted to live in Repuke haven Florida,

then why are they sucking at the Social Security teat?

[KamaAina]

14. Where is Repuke Haven, Fla.?

Is it near Winter Haven? :shrug:

This just in: Florida's 27 electoral votes will be going to President Barack Obama.

[Thothmes]

19. They paid for the Social Security, its theirs

Maybe we should means test Social Security.

[taught_me_patience]

13. Completely agree with this one

The main problem with the California budget is the -$30B balance the Federal Government takes and gives to red states (then most people in those states bitch about the "libruls" in California). It's disgusting.

[mrreowwr_kittty]

16. My dumbass fucking state passed a Constitutional amendment that practically bans raising taxes

In AZ, you have to get 2/3 of the legislature to approve a tax increase. And then we've had a tax-cut happy bunch of Repuke morans in charge for decades. So basically we have nothing coming in and have been whalloped by the housing market collapse. We might lose Gov. Janet Napolitano to the Obama admin. Normally, with a GOP controlled lege (and we actually managed to lose Dem seats this election) I'd be praying that she's stay, but now I'm inclined to just say screw it. If the fugging idiots here think Republican policies are so grand then let them really see how well they work. Janet should just take off and let the fundie who is Sec'y of State take over. Jan Brewer (who is an older Sarah Palin) will sign whatever whackjobbery they put in front of her into law. I've concluded that Arizona needs to crawl around in its dirty diaper a bit longer, until they finally get the point.

[Cleita]

12. Getting rid of Schwarzenegger in California would be a step in the right

direction. The only way to get rid of the deficits is to raise taxes on the wealthy top 5% of both individual and corporate entities who own ninety percent of the wealth in California, many of it is from foreign companies and individuals who take it out of the country. This is something Ahhnold is unwilling to do. He'd rather cut wages on state employees instead.

[riqster]

17. This is a result of the Bush tax cuts

The feds turned the spigot waaaaaaaaaay down on funds to states. Shit rolls downhill...

[Greyhound]

20. 28 years and still counting.

Will American's ever wake up to the fact that Raygun's economy was the result of stealing money from the states and maxing out the kid's credit cards? We have been in a downward spiral for three decades and the answer hasn't changed in all that time.

Military spending, every dime of it, is a net loss to the economy and therefore must be drastically cut. 50% to start.

Privatizing the commons must immediately stop and what has been turned over must be taken back or, if it has been allowed to deteriorate by the parasites that have been sucking it dry, rebuilt.

Taxes must be raised dramatically on high incomes, especially unearned income, those that take from the system have to put it back if we are to survive, and we may have to consider a tax on extraordinary assets as well.

Of course this sucks, we started the process under Carter but it was short-sighted wishful thinkers that chose to believe they could put it off. Now the bills are much higher and will be more painful to pay. It is only right that the lion's share of the load be borne by those that benefited the most.