Posted on 09/04/2009 6:23:42 AM PDT by St. Louis Conservative
State government finances are a wreck. The drop in tax receipts is the worst in a half century. Fewer than 10 states ended the last fiscal year with significant reserves, and three-fourths have deficits exceeding 10% of their budgets. Only an emergency infusion of printed federal funny money is keeping most state boats afloat right now.
Most governors I've talked to are so busy bailing that they haven't checked the long-range forecast. What the radar tells me is that we ain't seen nothin' yet. What we are being hit by isn't a tropical storm that will come and go, with sunshine soon to follow. It's much more likely that we're facing a near permanent reduction in state tax revenues that will require us to reduce the size and scope of our state governments. And the time to prepare for this new reality is already at hand.
The coming state government reset will be particularly wrenching after the happy binge that preceded this recession. During the last decade, states increased their spending by an average of 6% per year, gusting to 8% during 2007-08. Much of the government institutions built up in those years will now have to be dismantled.
For now, my state's situation is far better than most, but it won't stay that way if we fail to act in Indiana. At present, we are meeting our obligations, without raising taxes, and still have over $1 billion in reserve. But the dominant reality is that even assuming the official revenue projections are accurate (and they have been consistently too rosy for the past two years), the state of Indiana will have fewer dollars to work with in 2011 than it did in 2007. Most other states face similar or worse prospects.
(Excerpt) Read more at online.wsj.com ...
“They call it “Acorn” cuz they’re all nuts!
Just had to get that in there.
So states will be diminished by this severe economic downturn and the federal government will be strengthened. hmmmm...wonder whose hand that plays into?
Starve the BEAST!
Actually...I think..for overall government to be more responsive...the Feds need to shrink..and yield power to the states. Unfortunately, I suspect, that power will need to be taken back.
Well, jeez, with all the oil some of these states have, they could add another source of revenue if they stood together against the fed and led the charge on drilling domestically.
Downsize??
If California is any predictor, they’ll save, and even increase, the featherbedded Union jobs (monuments and cultural centers) and threaten to cut essential services (police/fire and roads) - justifying massive tax hikes...
Politicians are required to believe in the bottomless money sack....
We have hit the level where the Welfare State is no longer sustainable by tax revenues.
I predict that will be the next big movement. Arizona already has a measure on the ballot to specifically exempt their state from any kind of federal health plan (ObamaCare). There is an effort in Florida to do the same thing, and Perry in Texas has made comments about doing this. I think we’ll start seeing a big resurgence in 10th amendment movements sprouting up in the next few years.
They will cut everything EXCEPT public union pay and pensions.
If the state power starts shrinking while federal power grows, things will just get worse.
How about this, state governments and wussy governors will only be too eager to accept, bailouts, by the fed, further sealing their fate and that of their citizens. Instead of a Republic of united states, it is a united federal government
with the states at each others throats for the liberal hand outs of cash and goodies. If you have a liberal big city in your state, all the better for you. If your state is associated with the word CONSERVATIVE, you could be in trouble.
The federal government is the problem. Federal mandates on the states like Medicaid, which require matching funds, now comprise more than 22% of state budgets and it is growing.
This is best document I’ve seen come from a sitting Republican politician on economics in quite some time. I just hope he’s a no kidding conservative and doesn’t make weekend trips to South America.
If they had kept spending limited to inflation rate plus population growth, they wouldn't be in trouble now. But, that's too hard for politicians.
Your friendly Homeland Security chief, former guvnah Janet Napolitiano, ran up Arizona's debt like this, but she is a smart crony. She bailed before she could be held accountable. At last Tuesday's Gabby Giffords town hall meeting, Nappy got one of the loudest rounds of boos. Good for her.
+1
The states with energy resources need to say FU to the Fed and just start drilling. What are they going to do? Send in the army to shut down the rigs?
It’s past time to show the arrogant fascists in the central government who’s in charge.
And since when has reality ever caused politicians, especially the liberal left, to change their opinions or actions?
Look at the Metropolitan Water District in southern California (well duh!) They have just INCREASED the pension entitlements.
I would hate to be in LA or Oakland on the day the welfare checks don't come. Perhaps that will be their wakeup call.
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