States Turning to Last Resorts in Budget Crisis

In Hawaii, state employees are bracing for furloughs of three days a month over the next two years, the equivalent of a 14 percent pay cut. In Idaho, lawmakers reduced aid to public schools for the first time in recent memory, forcing pay cuts for teachers.

And in California, where a $24 billion deficit for the coming fiscal year is the nation’s worst, Gov. Arnold Schwarzenegger has proposed releasing thousands of prisoners early and closing more than 200 state parks.

Meanwhile, Maine is adding taxes on candy and ski tickets, Wisconsin on oil companies, and Kentucky on alcohol and cellphone ring tones.

Read it all.


Posted in * Economics, Politics, Economy, Politics in General, State Government, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

9 comments on “States Turning to Last Resorts in Budget Crisis

  1. Capt. Father Warren says:

    Please note that in all these stories you see a minimum of cuts in state government: from Governor, Legislature, and down into all the agencies. Also note that government unions are taking few hits. The favorite efforts are even more revenue sources (taxes) or cutting services like health and education which are intended to cause the most pain thus building pressure to replace the revenues and avoid the really hard choices.

  2. AnglicanFirst says:

    New York, the state that instituted the professional civil service sytem in the late 1800s has an accretion of offices, agencies, sub-agencies, commissions and perpetuated special projects that produced such a parasitic burden that taxpayers and corporations have been fleeing New York State for generations.

    What was once the “Empire State” is now the “Welfare State.” The numbers of people who actually do ‘useful’ and ‘productive’ things to earn a living is an increasingly smaller part of the population.

    Cities, like Schenectady, which once employed about 30,000 people at the General Electric Company and at the American Locomotive Company (ALCO), litter Upstate New York with a legacy of unemployed/underemployed people who add to the huge welfare population of the New York City area.

    This a problem that has been brought upon New York State by generation after generation of politicians and those who voted them into office.

    The only solution for states like New York and California is “tough love.”

  3. Chris says:

    yep #1, they cut the most essential things first so they can later justify tax increases (“our constituents want X back”).

  4. Ad Orientem says:

    Re # 1
    Capt. Deacon Warren,
    [blockquote] Please note that in all these stories you see a minimum of cuts in state government: from Governor, Legislature, and down into all the agencies[/blockquote]

    I can’t speak for the other states, but I can assure you in the strongest terms that [b]deep[/b] cuts in state spending are coming in California. Right now the only debate is whether the cuts will be draconian or merely brutal. People have complained about excessive government spending for years in this state. IMO more than a few of those complaints have been justified. But they have also demanded the state give them “this, that and the other thing.” The only problem being that when asked how they wanted to pay for it all the general response was “who said anything about paying?”

    If the governor’s proposals pass, and I think there is a strong likelihood that most of them will, people here are going to discover what minimal government means. And a lot of them are not going to like it.

  5. Paul PA says:

    #4 – You seem in the know – I read that they cut legislators salaries by 18% but that still leaves them the highest in the country. Is this correct? Would the same be true in other parts of the state government/employment? How do government salaries and benefits compare?

    Also – Is it possible to reduce the number of people in some departments and have a less draconian result? Obviously this is the perception of those of us on the outside.

  6. Chris says:

    “In the five years between 2002 and 2007, combined state general-fund revenue increased twice as fast as the rate of inflation, producing an excess $600 billion. If legislatures had chosen to be responsible, they could have maintained all current state services, increased spending to compensate for inflation and population growth, and still enacted a $500 billion tax cut.

    Instead, lawmakers spent the windfall. From 2002 to 2007, overall spending rose 50 percent faster than inflation. Education spending increased almost 70 percent faster than inflation, even though the relative school-age population was falling. Medicaid and salaries for state workers rose almost twice as fast as inflation.”

  7. Ad Orientem says:

    The New York Times has posted [url=]interesting discussion[/url] on the current crisis in California from several different perspectives. I tend to agree with Ron Paul’s view. But the cuts are still going to be extremely painful.

  8. Jeffersonian says:

    I agree with #6. Matt Welch has positively been on fire about California’s unbelievable spending binge. Let’s hope the message gets through to Californians and their legislooters.

  9. Carol R says:

    It’s amazing to me how California used to have such an image as a place of pioneering, independent people who fostered a spirit of anyone can realize their dreams with hard work, big ideas and maybe a liitle luck. And they seemingly quickly evolved into a place that seems regulated out the rear end, and expecting the state to provide and control all . . . for all . . . and for free. I don’t understand how it happened so fast.