It looks great, until you're drowning in it.
We’ve been saying for some time now that the budget problems in the states is at some point going to be a big problem, like a tornado-just-blew-my-house-away big. With the wife and kids in it. And the dog.
The 50 states currently face collectively a roughly $140 billion budget shortfall, and while California’s problems have been the most prominent, the Golden State is far from alone.
“The same pressures that drove (California) toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country,” the Pew Center said in a fresh report. The report looks at the 10 states in the worst shape: California, Nevada, Arizona, Oregon, Michigan, Wisconsin, Illinois, Florida, Rhode Island and <snif!> my beloved (and often concurrently reviled) New Jersey.
It’s a gathering storm, to be sure, being held back at present only by federal stimulus largesse, as the Journal reported yesterday:
Once stimulus funds have been accounted for, states still face a combined deficit of $142 billion for fiscal 2011, up from $113 billion for the current fiscal year, according to the Center on Budget and Policy Priorities.
(Incidentally, there were a cluster of stories in the Journal’s “A” section yesterday, beginning with the front page story on the dollar and ending with the “Woody Allen Policy” on the op-ed, that had me on the verge of screaming “Wake up, America!” on the bus ride home.)
Fiscal 2011 starts, I believe, at some point in 2010. I’m pretty sure states are already into their fiscal 2010 budgets. So we’re talking about all this coming to a head next calendar year. Which should make for such an entertaining election season, don’t you think?
But today, a story that crossed the tape (that’s short for the Broadtape, a nickname for the DJ wire) that should make your hair stand on end. The Pew Center, as if their ominous report wasn’t enough, convened a conference on the issue. Here are the two “money quotes” (pun most definitely intended.)
“We’re facing a cliff in 2011 when stimulus dollars run out,” said Mitchell Bean, director of the Michigan House Fiscal Agency. “There is not an end in sight, even in recovery.”
“I looked as hard as I could at how states could declare bankruptcy,” said Michael Genest, director of the California Department of Finance, who is stepping down at the end of the year. “I literally looked at the federal constitution to see if there was a way for states to return to territory status.”
Now that would certainly constitute outside the box thinking.
America, wake up.
