APRIL is always a tense month in America. Their tax forms due in, Americans scramble to organise a year’s worth of assorted paperwork. Post offices stay open long past their usual closing times on the 15th, as last-minute filers dash to send off their returns and beat the deadline.
This spring promises to be even more nerve-racking than usual for treasurers in the 50 states who wonder how much, or how little, the tax filers will send them. As America’s economic doldrums persist, some states’ budgets are feeling the pinch. California has told 20,000 teachers and support staff that they may be sacked. People whose health insurance is subsidised by their state may face higher fees in Vermont or be cut out entirely in Maine. Massachusetts’s governor wants to legalise gambling in order to raise revenue.
Economic downturns depress tax receipts and boost demand for state-provided social services. And while the federal government can weather a slide in revenue by borrowing, most states are required by law to balance their operating budgets every year, leaving the cash-strapped with two unattractive options: raise taxes or cut spending. State legislatures usually take the second course, scaling back public services or freezing hiring.