States Other Than California Facing a Budget Disaster

By Beacon Staff

It is well-known that California is in trouble financially. Gov. Arnold Schwarzenegger estimates that the state will run a deficit of up to $14.4 billion when he releases his budget in January. What – until now – has made fewer headlines is all the other states that are on the brink of budget disasters. According to a Pew Center on the States report, nine other states are in big trouble. From the Associated Press:

SACRAMENTO, Calif. — In Arizona, the budget has grown so gloomy that lawmakers are considering mortgaging Capitol buildings. In Michigan, state officials dealing with the nation’s highest unemployment rate are slashing spending on schools and health care. Drastic financial remedies are no longer limited to California, where a historic budget crisis earlier this year grew so bad that state agencies issued IOUs to pay bills.

A study released Wednesday warned that at least nine other big states are also barreling toward economic disaster, raising the likelihood of higher taxes, more government layoffs and deep cuts in services.

The report by the Pew Center on the States found that Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin are also at grave risk. Double-digit budget gaps, rising unemployment, high foreclosure rates and built-in budget constraints are the key reasons.

“While California often takes the spotlight, other states are facing hardships just as daunting,” said Susan Urahn, managing director of the Washington, D.C.-based center. “Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers.”

Montana’s state Legislature deserves a little credit.