California passed a gas tax last week to help make up for its nearly $20 billion budget gap, the latest in a series of measures to right the state’s teetering economy. The country of Greece is in even worse shape, with accumulated debt higher than 110 percent of GDP, set to reach 125 percent this year. Can a state declare bankruptcy? Can a country?

No and no. Chapter 9 of the U.S. bankruptcy code allows individuals and municipalities (cities, towns, villages, etc.) to declare bankruptcy. But that doesn’t include states. (The statute defines “municipality” as a “political subdivision or public agency or instrumentality of a State”””that is, not a state itself.)

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The state budget presented six weeks ago by Missouri Gov. Jay Nixon may have overestimated revenues by as much as $1 billion, lawmakers warned Tuesday.

The stunning deficit could force lawmakers to go beyond program and service cuts to consider major structural changes to state government.

“It is clear that even as Missouri’s economy begins to rebound, state revenues will continue to lag for a prolonged period of time,” Nixon, a Democrat, said in a statement Monday. “As a result, we will need to downsize the scope of state government, while protecting necessary services to the citizens of Missouri.”

That announcement was underscored Tuesday by the release of state revenues for February, which showed a year-to-date decline of 12.7 percent compared with this time last year, and a 14.6 percent drop in revenues for February.

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The cuts are also being felt in economically depressed areas like Richmond, near San Francisco, where unemployment is 17.6 percent and violent crime and poverty are common.

“Kids come to school hungry; some are homeless,” said Mary Flanagan, 55, a third-grade teacher from Richmond. “How can we deal with problems like that with as many as 38, 40 kids in a class?”

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The people of Arizona kept their upper lips stiff when officials mortgaged off the state’s executive office tower and a “Daily Show” crew rolled into town to chronicle the transaction in mocking tones. They remained calm as lawmakers pondered privatizing death row.

But then the state took away their toilets, and residents began to revolt.

“Why don’t they charge a quarter or something?’” said Connie Lucas, who lives in Pine, Ariz., about a two-and-a-half-hour drive from here. “There was one rest stop between here and Phoenix, and we really needed it.”

Arizona has the largest budget gap in the country when measured as a percentage of its overall budget, and the state Department of Transportation was $100 million in the red last fall when it decided to close 13 of the state’s 18 highway rest stops.

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Barack Obama’s home state of Illinois is near the point of fiscal disintegration. “The state is in utter crisis,” said Representative Suzie Bassi. “We are next to bankruptcy. We have a $13bn hole in a $28bn budget.”

The state has been paying bills with unfunded vouchers since October. A fifth of buses have stopped. Libraries, owed $400m (£263m), are closing one day a week. Schools are owed $725m. Unable to pay teachers, they are preparing mass lay-offs. “It’s a catastrophe”, said the Schools Superintedent.

In Alexander County, the sheriff’s patrol cars have been repossessed; three-quarters of his officers are laid off; the local prison has refused to take county inmates until debts are paid.

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The recession can now claim another troublesome record: state tax collections shrank at the end of 2009 for a fifth consecutive quarter, the longest period of continuing state revenue declines since at least the Great Depression, according to a new report.

Over all, state tax collections fell to $134.5 billion in the last quarter of 2009, a 4.1 percent drop from the $140.2 billion collected during the same period a year earlier, according to the report, which will be released Tuesday by the Nelson A. Rockefeller Institute of Government.

While the drop in tax collections was less severe than earlier in the year ”” the record for the steepest drop was set last spring when tax collections fell by 16.6 percent compared with the same period in 2008 ”” the continuing declines are putting even more stress on states.

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These are tough times for state governments, many of which are contending with huge budget deficits.

Many states are likely to face an especially daunting challenge in the years ahead, according to a report issued Thursday. The states have promised big pension and retirement benefits to their employees without putting aside money to pay for them.

The report was prepared by the Pew Center on the States, and it portrays a state pension system that’s headed for a crisis ”” if it’s not already there.

“The 50 states have racked up more than $3.3 trillion in long-term liabilities in pensions, health care and other retirement benefits that they promised to their current employees and retirees,” says Susan Urahn, the center’s managing director. “But they have not got any money to set aside to pay $1 trillion, which is almost a third of this bill.”

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The sudden buzz over the relative value of senior year stems from a recent proposal by state Sen. Chris Buttars that Utah make a dent in its budget gap by eliminating the 12th grade.

The notion quickly gained some traction among supporters who agreed with the Republican’s assessment that many seniors frittered away their final year of high school, but faced vehement opposition from other quarters, including in his hometown of West Jordan.

“My parents are against it,” Williams said. “All the teachers at the school are against it. I’m against it.”

Buttars has since toned down the idea, suggesting instead that senior year become optional for students who complete their required credits early. He estimated the move could save up to $60 million, the Salt Lake Tribune reported.

The proposal comes as the state faces a $700-million shortfall and reflects the creativity — or desperation — of lawmakers.

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Sanford tells NPR’s Renee Montagne that she did not attend her husband’s news conference for two reasons.

“One, he didn’t ask me,” she said, “but if he had asked me, I would’ve said no. Two, we were separated. I don’t know what I would have stood by him about….”

“Talk about another gut punch,” Sanford tells Montagne. “I said, ‘gee whiz. He saw me as an adviser and wanted me to give him political advice about how he was received.'”

Asked what she told her husband, Sanford recalls saying, “‘Are you kidding? You cried for your lover and said very little of me or the boys.”

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With their high-priority issues prominent on national agendas, members of the clergy have been unusually active in politics. Catholic bishops in New Jersey and elsewhere have been especially vocal on matters such as same-sex marriage, national health care and illegal immigration.

Yet polls show that when Catholic bishops press their positions with politicians on such issues, they often do so without the support of large segments of the lay people in their dioceses.

Regarding same-sex marriage ”” which the bishops oppose and which the New Jersey Legislature rejected this month after intense debate ”” American Catholics are divided, polls have shown. On health care reform, a majority appear to disagree with the bishops’ position that no health care bill is acceptable if federal money can be used to pay for abortions. On immigration reform, a third disagree with bishops’ call to give illegal immigrants a path to citizenship, according to a Zogby poll released last month.

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All our faith traditions share a fundamental belief that human beings are made in the image and likeness of God and that we must treat every person with dignity, for “the strangers who sojourn with you shall be to you as the natives among you, and you shall love them as yourself” (Leviticus 19:33-34). The interfaith statement includes seven principles that are rooted in our holy Scriptures, our faith traditions and our sense of American democratic values, which include:

”¢ ”¢”‚upholding family unity;

”¢ ”¢”‚creating a legalization process for undocumented immigrants;

”¢ ”¢”‚protecting workers;

”¢ ”¢”‚facilitating immigrant integration;

”¢ ”¢”‚restoring due process and just detention protections;

”¢ ”¢”‚aligning enforcement with humanitarian values;

”¢ ”¢”‚immigration as a matter of human rights.

Immigration reform would make us safer as a nation because it would make immigrants register with the government so that we would know who is here and give us the ability to identify those few immigrants who have committed crimes. Giving immigrants a reason to come out of the shadows would also allow them to feel comfortable cooperating with law enforcement to help identify those who are a danger or a threat.

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A measure being considered by the Kansas Senate Judiciary Committee to repeal the state’s death penalty picked up eight supporters on Friday.

In a letter to the Kansas Legislature, eight bishops of the Episcopal Church, Roman Catholic Church, Evangelical Lutheran Church and United Methodist Church in Kansas signed a letter asking for reconsideration and repeal of the Kansas death penalty.

Signing the letter, dated Jan. 28, were Bishops James M. Adams Jr., Episcopal Diocese of Western Kansas; Paul S. Coakley, Catholic Diocese of Salina; Ronald M. Gilmore, Catholic Diocese of Dodge City; Michael O. Jackels, Catholic Diocese of Wichita; Scott J. Jones, Kansas Area United Methodist Church; Gerald L. Mansholt, Evangelical Lutheran Church in America; Joseph F. Naumann, Catholic Archdiocese of Kansas City; and Dean Wolfe, Episcopal Diocese of Kansas.

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“Arizona is ground zero for our nation’s broken immigration policies,” [Methodist Bishop Minerva] Carcaño said. “At our borders and in our congregations, schools, workplaces and service programs, we witness the human consequences of our inadequate, outdated system.”

Bishop Gerald Kicanas, who heads the Roman Catholic Diocese of Tucson, outlined eight principles for immigration reform, among them supporting programs that reduce poverty in developing nations so people won’t have to leave, creating a process for undocumented immigrants in this country to earn legal status and citizenship, and reducing the detention of immigrants for non-violent crimes.

A recent Zogby poll suggested that religious leaders are often at odds with their members over the issue of immigration reform. Commissioned by the Center for Immigration Studies, a think tank in Washington, D.C., that favors less immigration, the poll said 64 percent of Catholics and Protestants favor cracking down on illegal immigrants, compared with 23 percent of Catholics and 24 percent of Protestants who support a legalization program for undocumented immigrants.

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Anote of gratitude is due Los Angeles County Superior Court Judge David P. Yaffe for ordering the immediate firing of Matthew Kim after a tortuous seven-year saga. This wasn’t the first time that Yaffe tried to inject common sense into the absurdly difficult and expensive task of ridding classrooms of teachers who don’t belong there. His previous decision to allow the Los Angeles Unified School District to fire Kim, issued in July, was ignored by the panel that has authority over contested teacher dismissals.

The Kim fiasco is a reminder of just how many thousands of dollars and costly lawyers and innumerable court appearances are currently required to fire incompetent or otherwise troublesome teachers. And, adding insult to injury, Kim has been paid his full salary and benefits since 2003 while doing no work for the district.

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Read it all. I see over on Intrade that Brown is up to 70 and Coakley is down to 30. It will be stunning if it holds–KSH.

For the first time in South Carolina history, the House of Representatives has censured a governor.

The House voted 102-11 on Wednesday to formally rebuke Gov. Mark Sanford for dereliction of duties, official misconduct and abuse of power when he traveled in June 2008 and June 2009 to see his mistress in Argentina.

Sanford also was condemned by the House for a handful of trips he took on state aircraft for alleged personal and political reasons.

Sanford brought “ridicule, dishonor, shame and disgrace to himself, the state of South Carolina and to its citizens,” according to the censure resolution. The censure serves no practical purpose other than to formally rebuke Sanford.

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Meanwhile, California’s largest cash crop is being largely ignored in the frenzied search for politically-viable revenue. The state’s marijuana yield is conservatively valued at $14 billion annually ”“ nearly double the combined value of our vegetable and grape crops. The state Board of Equalization estimates that taxing adult marijuana consumption like alcohol would generate $1.4 billion in new revenue for the state. While that’s only a modest contribution toward our fiscal woes, it’s one more incentive to end decades of failed marijuana prohibition. In fact, the financial and human price that we currently pay for criminalizing pot is far too high.

California, which decriminalized low-level marijuana possession in 1975, arrested more than 78,000 people for marijuana offenses last year alone, a nearly 30 percent increase since 2005. Of those arrested, four out of five were for simple possession, and one in five was a child under the age of 18. Police disproportionately arrest young people of color, many of whom permanently enter the criminal justice system and suffer severe limitations to their educational and employment opportunities.

California spends hundreds of millions of dollars to enforce marijuana prohibition. While law enforcement focuses ever-increasing resources on arresting marijuana users, there were 185,173 reported violent crimes in California in 2008, but only 125,235 violent crime arrests. Where are our priorities?

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Marijuana advocates are cheering the Assembly’s Public Safety Committee for voting out a measure Tuesday designed to legalize, tax and regulate the sale of the drug to adults 21 and over. The bill is being marketed as a revenue raiser; the Board of Equalization estimates that the state could reap up to $1.3 billion in sorely needed tax revenue, and proponents have skillfully wielded the budget crisis to boost support for the measure.

Polls show that 56% of Californians back legalizing marijuana. Across the country, the numbers are somewhat lower, but nevertheless momentum is building for a reconsideration of marijuana laws covering both medicinal and recreational use. Many states now treat marijuana offenses as mere infractions, not subject to jail time. The American Medical Assn. recently reversed its long-held position and urged more research into the drug’s properties.

Still, for California to purport to legalize marijuana unilaterally raises several serious concerns. For one thing, to do so simply because the state faces a budget crisis would be a rash and reckless way to make public policy.

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A major credit-rating agency lowered California’s debt rating Wednesday, putting pressure on Gov. Arnold Schwarzenegger and lawmakers to start tackling the state’s $20 billion deficit.

Standard & Poor’s lowered its rating on California’s $64 billion general obligation debt one step, from “A” to “A-.” The agency also dropped $9.4 billion in lease-revenue bonds three notches, from “A-” to “BBB-.”

California had the lowest general obligation rating of any state when S&P dropped it from “A+” to “A” in February 2009. Fitch and Moody’s, two other rating firms, have followed with their own downgrades.

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The New Jersey state Senate on Thursday (Jan. 7) voted down a bill to legalize same-sex marriage, prompting a promise from gay-rights advocates to take their campaign to the courts.

The final tally, 20-14 with three abstentions, reflects a dramatic shift in the state’s political landscape since gay-marriage supporter Gov. Jon Corzine lost his bid for re-election to Republican Chris Christie in November.

Christie came out strongly against the bill, emboldening opponents of same-sex marriage and drawing undecided senators to the Republican fold. He has also said he would veto a same-sex marriage bill if it ever reached his desk.

Steven Goldstein, who led the push for gay marriage as chairman of the gay-rights group Garden State Equality, said he and other advocates would move swiftly to force the issue in the courts.

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Oregon is one of several states that provides funding for so-called indigent burials. Historically, this money pays for a final service for people with no home or relatives. But in 2009, Gunson says, an unprecedented number of bodies went unclaimed ”” some for a month or more ”” not because family couldn’t be found, but because the economy has left families unable to pay for even the most basic $500 cremation.

“We don’t really want to become a storage place,” she says.

The trend is elusive to track. In Oregon, demand on the indigent burial fund was so high last year, the Legislature had to nearly triple fees on death certificates to keep the fund solvent. Illinois received so many requests for burial help that its fund was temporarily shut down over the summer. And in Michigan, where the economy hemorrhaged 300,000 jobs last year, indigent burials nearly doubled, from 2008’s 603 to more than 1,100.

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It is one of the bleakest new years that states have seen in over a decade.

On Wednesday, governors in California, Kentucky and New York kick off the season of addresses to state lawmakers as at least 36 states struggle to close budget shortfalls and also begin confronting the next fiscal year’s woes.

For many of the states, the new year spells the end to accounting maneuvers, one-off solutions, tax increases and service cuts that were as deep as lawmakers thought they could bear. And governors confront this situation in an election year in which dozens of their jobs are in play, and as many state legislators face their own election challenges.

“A budget gap of 5 percent or 10 percent in any given year is a tough problem,” said Corina Eckl, fiscal director at the National Conference of State Legislatures. “But we’re talking about gaps in excess of 20 percent over multiple years. The size of these gaps is staggering.”

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The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth, according to the chairman of New Jersey’s pension fund.

The estimate by Orin Kramer will fuel investors’ concerns over the deteriorating financial health of US states after the recession. “State and local governments are correctly perceived to be in serious difficulty,” Mr Kramer told the Financial Times.

“If you factor in the reality of these unfunded promises, their deficits will rise exponentially.”

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Between dealing with terrorism threats and crises abroad, President Obama is unwinding in Hawaii with his family this week. They’ve snorkeled in pristine bays and dined in fashionable restaurants. Tourism officials only wish there were thousands more visitors like them.

Tourism is the glue that holds this island state’s finances together, keeping its streets clean, its workers paid and its children educated. But for the last two years, vacationers and conventioneers alike have abandoned Hawaii in favor of less exotic destinations closer to home. The result is an unprecedented slowdown in the industry and some cavernous cracks in the state’s budget.

Hawaii was so short of cash last year that it furloughed teachers and suspended school for 17 Fridays during the academic year, giving students the fewest school days of any state in the union. Home foreclosures and bankruptcy filings are soaring. The unemployment rate has more than doubled over the last two years to 7.0%. Though that’s well below the national average of 10.0%, it’s a stunner for a place that just a few years ago boasted a jobless rate of less than 3%.

For the first time in a decade, the number of Hawaiians receiving welfare benefits has increased.

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Colorado’s minimum wage will drop slightly in the new year – the first decrease in any state’s minimum wage since the federal minimum was adopted in 1938.

Colorado’s wage is falling 3 cents an hour, from $7.28 to the federal level of $7.25. That’s because Colorado is one of 10 states that tie the state minimum wage to inflation. The goal is to protect low-wage workers from having unchanged paychecks as the cost of living goes up.

But Colorado’s provision also allows wage declines, and the state’s consumer price index fell 0.6 percent last year, so the minimum wage is going down.

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With 30 hours of help a week, Christina Stewart could care for her mentally and physically disabled 9-year-old daughter, but come Friday her ability to keep the child at home will be put in jeopardy.

Hundreds of families will be put in the same position as the new year rings in, and at-home services for disabled residents are dramatically scaled back.

For Stewart, the number of hours of help available to care for her daughter, Camille, will be cut almost in half.

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Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already suffering local mass transit programs, renew his push to expand oil drilling off the Santa Barbara coast and appeal to Washington for billions of dollars in federal help, according to state officials and lobbyists familiar with the plan.

If Washington does not provide roughly $8 billion in new aid for the state, the governor threatens to severely cut back — if not eliminate — CalWORKS, the state’s main welfare program; the In-Home Health Care Services program for the disabled and elderly poor, and two tax breaks for large corporations recently approved by the Legislature, the officials said.

Schwarzenegger also will propose extending a cut in the state payroll that is scheduled to expire this summer. That cut has translated into 200,000 state workers being furloughed three days a month, the equivalent of a 14% pay cut. Lawmakers would have the option of extending the furloughs, imposing layoffs or some combination of the two.

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New census data shows that South Carolina’s population grew by more than half a million people during the past nine years, a nearly 14 percent increase with important political implications in the next decade.

The numbers are the last to be released before the 2010 census, which among other things will determine how many U.S. House seats each state gets.

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Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already suffering local mass transit programs, renew his push to expand oil drilling off the Santa Barbara coast and appeal to Washington for billions of dollars in federal help, according to state officials and lobbyists familiar with the plan.

If Washington does not provide roughly $8 billion in new aid for the state, the governor threatens to severely cut back — if not eliminate — CalWORKS, the state’s main welfare program; the In-Home Health Care Services program for the disabled and elderly poor, and two tax breaks for large corporations recently approved by the Legislature, the officials said.

Schwarzenegger also will propose extending a cut in the state payroll that is scheduled to expire this summer. That cut has translated into 200,000 state workers being furloughed three days a month, the equivalent of a 14% pay cut. Lawmakers would have the option of extending the furloughs, imposing layoffs or some combination of the two.

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Currently, nearly 700,000 people in Florida receive unemployment benefits. For employers such as Kevin Rusk, owner and founder of the Titanic Brewery and Restaurant in Coral Gables, it comes with a cost.

Rusk is one of the thousands of business owners statewide who soon will receive notice that his unemployment insurance premiums are rising ”” in fact, skyrocketing.

The minimum rate for employers with few claims, which was $8, is leaping to more than $100 per employee. That has left business owners like Rusk with sticker shock.

“In my business, if I said I was going to increase the price of a burger,” Rusk says, “I can increase it 5 percent, 10 percent, you know? They increased it 1,200 percent, and that’s just a sour pill for most people to swallow.”

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