[Vision2020] State Budget Deficits

Joe Campbell philosopher.joe at gmail.com
Mon Jan 3 14:40:18 PST 2011

Any specific programs we should cut? Please be specific. There's no
election, Jeff, so could just cut the scare crap and tell us what you think
we should do, specifically what programs we should cut?

On Sun, Jan 2, 2011 at 10:15 PM, Jeff Harkins <jeffh at moscow.com> wrote:

>  Paying for the music!
> After years of deficit financing for state and local government (dems and
> repubs), it is time to begin to pay for the music.
> Here is a teaser intro to get folks to focus on the problems we are now
> facing.  Before you gnash your teeth and wring your hands in despair, be
> sure to link to the full article - then let the gnashing begin.
> We, as a nation and a republic of states are in serious fiscal condition.
> Our present situation is NOT SUSTAINABLE.  Each U.S. citizen is going to
> sacrifice - over the next several decades.
> *State and local government budgets* faced challenges as the nationwide
> economic downturn that began in 2008 continued to cause budget problems in
> the economy. One of the greatest challenges that budget makers faced was
> lower-than-expected revenues from taxes. In Fiscal Year 2009, budget makers
> were overwhelmed by lower-than-expected revenues from taxes. Additionally,
> public spending at the state and local level is 10 times what it was in the
> 1950's, while private spending is only 5 times what it was during the '50s.
> [1] A recent report by the Government Accountability Office reported the
> state local gap at $9.9 trillion.[2]
>    - *See also: State budget issues, 2010-2011*
> As a report produced by the National Center of State Legislatures
> concluded,
> Lawmakers in virtually every state scrambled to keep their FY 2009 budgets
> balanced while at the same time struggling to enact new ones for FY 2010.
> Hemorrhaging revenues drove the massive difficulties they faced. No matter
> how pessimistic revenue forecasts were, actual collections seemed to come in
> lower. This happened over and over and over again. Ultimately, states were
> not just faced with lower revenue growth rates, they confronted
> year-over-year declines in actual collections[3].
> The Government Accountability Office has said,
>   “ … closing the fiscal gap over the next 50 years would require action
> to be taken today and maintained for each and every year going forward
> equivalent to a 12.3 percent reduction in state and local government current
> expenditures. Closing the fiscal gap through revenue increases would require
> action of a similar magnitude ….[4] ”
> A subsequent report by the National Governors Association and National
> Association of State Budget Officers found that FY2010 presented the most
> difficult challenge for states’ financial management since the Great
> Depression.[5]
> In total, states faced a budget shortfall of $113.2 billion in FY 2009. As
> substantial as that is, it is far less than the deficit some have forecast
> for FY 2010. According to one such projection, states could face a total
> shortfall of $142.6 billion this year.[3] The Government Accountability
> Office (GAO) has said that state and local government could be facing a $10
> trillion gap over the next several years.[6]
> Federal “stimulus” funds, authorized under the American Recovery and
> Reinvestment Act, helped some states avoid some cuts in programs and civil
> service employment. However, as the entry below explains, that short-term
> fix carries costly consequences as well.[3]
> http://sunshinereview.org/index.php/State_budget_issues%2C_2009-2010
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