New Year but No Relief for Strapped States

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