National Survey Reveals Escalating Budget Crisis for States
According to a national report issued by the National Conference of State Legislatures, states face a $97 billion budget gap for FY 2009 that must be closed during the next 18 to 24 months. The actions they take will be in addition to the belt tigteneing they have undertaken to close the gap by $40 billion already.
Fifteen states are forecasting double-digit gaps in FY 2010 with the largest gaps in Arizona (24.2%), New York (20%), California (18%), Wisconsin (17.2%), Minnesota (14.7%) and Kansas (14.5%).
NCSL's report says deteriorating revenues in nearly every state are the main culprit behind current state fiscal conditions. Sales, personal and corporate income tax revenues are shrinking as consumer confidence plunges, unemployment rates rise and businesses continue to close.
States have taken these initial actions or proposed solutions to get a handle on growing imbalances.
At least 10 states have imposed and another 10 states are considering across-the-board budget cuts.
- State employees are being affected by cost-saving measures.
- Nineteen states have implemented hiring freezes, 14 states others have banned travel and four states have frozen salaries.
- Five states have tapped their rainy day funds and six others are looking at that option. These funds will be tapped for at least $3.7 billion in FY 2009.
Legislatures will continue to look at possible solutions in January when the majority of them convene. All 50 states and Puerto Rico will hold legislative sessions in 2009.
Click here for NCSL's interactive State Budget Update interactive map, where you can track state-by-state data contained in the report.
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