The Next Wave Of GDP-Killing State Budget Slashing Begins
Courtesy of Lawrence Delevingne at Clusterstock/Business Insider
Most state budgets have been walloped by the financial crisis. But, as we noted in November, 10 are really bad, like California bad.
Now, the real pain is coming.
Decrying budget shortfalls is an abstract exercise, but service cuts, increased taxes, and layoffs are all very real, and when they happen, GDP falls.
Paul Krugman once referred to states that slash their budgets as Little Herbert Hoovers.
It’s a bleak picture. Based on historical precedent, state budgets are likely to get worse, bottoming long after the national economy, with costs rising faster than revenue.
The 10 Worst State Budgets & Cuts –>
Methodology notes: The top ten ranking is taken from a November 2009 Pew Center on the States study. The ranking looks at budget gaps, foreclosure rates, lost state revenues, unemployment, money-management practices, and where "super-majority" requirements are killing efforts to fix the financial mess. Scores for each category are tallied for an overall ranking. We bring you the top 10, counting down from bad to worst. The higher score, the bigger the crisis. California gets a 30, while the national average is 17.
The deficit numbers are taken from a December 2009 Center on Budget and Policy Priorities’ State Fiscal Project study.
Information on recent and looming deficit fixes are from media reports and a seperate CBPP report.
