How bad should budgets get before states are bailed out?
Ten states struggled to pass budgets before the Tuesday deadline, including Illinois. According to the Wall Street Journal, state governments could face partial shutdowns if budgets aren’t created soon.
In Illinois, the new fiscal year has already started with no budget, according to a St. Louis Post-Dispatch article.
The state will ultimately be more than $9 billion in the red for the fiscal year that starts today, Gov. Pat Quinn’s administration says, unless the Legislature provides new revenue. He has warned of potential deep cuts in human services such as day care subsidies and elder care, as well as interruptions in other state functions, if the budget gap isn’t closed.
State economies are so desperate they may even seek federal bailouts, many say. California has already asked for federal backing. Instead of asking for cash, they are asking the federal government to serve as more of a co-signer on loans, according to the Associated Press.
Although the Obama Administration already denied the request, many wonder what will happen to California if they don’t find a solution soon.
Fox News on TV this morning warned of a possible collapse in state government. California and other states could be unable to pay its police officers, firefighters and other city workers. In Illinois, human services will be cut along with the pay of social service workers.
In light of this desperate economic situation, should states receive the help of the federal government? Like GM and AIG, if state budgets get bad enough, we will have a choice?
If state budgets get out of control what could this mean for the nation’s already struggling economy?
What is the difference between California and the US? California should be prospering, but they arent. They have health care for everyone, and no way to pay for it. They have High taxes, and those that can flee them, are. They have an immigration problem and no solution, they have strict environmental laws (which are killing agriculture). Look at California and yo uwill see where the US is heading, FLAT BROKE and no way out.
Give California to CHina as payment on our debt and lets move on.
SVPPB -
I see you are so knowledgeable about my home stat that you do not require any facts.
Even with a “failing economy” California is still doing better that many countries, not to mention many other states.
California also has an immense wealth of talent in non-traditonal areas other than manufacturing, ie agriculture, hi-tech, and the incipient green economy. Cf. http://www.latimes.com/business/la-fi-green-jobs11-2009jun11,0,3978144.story
Unlike many other states, Missouri included, California has not been afraid to take risks. Too many states have relied solely on their “traditional” bases for their economy, and those bases are disappearing or being severely reduced.
By the way, for every tax dollar California sent in to DC, they got $.79 (seventy-nine cents) back. compare that to Missouri ($1.29), Mississippi ($1.79), Kentucky ($1.45), Tennessee ($1.30), Alabama ($1.71), Alaska ($1.87), South Carolina ($1.38), Virginia ($1.66), West Virginia ($1.83) etc. In point of fact there are only seven states that receive less than California (New Hampshire, Connecticut, Massachusetts, New Jersey, Minnesota, Illinois, Nevada) all the rest either are more or exactly the same. Cf http://www.taxfoundation.org/UserFiles/Image/Blog/ftsbs-large.jpg
Did you notice anything about this list?