UP Ibalon Bicol: Money woes threaten the budget of at least 10 US states

Money woes threaten the budget of at least 10 US states

11/12/2009 | Posted by mesiamd | Edit Post

It is not enough to know that New York State has its own money trouble. According to the Washington based Pew Center, California together with 9 other states are on the brink of budget disasters. The group’s analysis put lawmakers and governors in these financially troubled states on notice to the looming increase in taxes, employee lay-offs, and slowing of government services. The economy deteriorates in California, Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

According to the report, quick action is needed to mitigate a fiscal disaster. Double digit budget deficits are rising with poor business, massive unemployment, and uncontrolled housing slump and foreclosures. The 10 vulnerable states are home to a third of the American population---California, with a huge economy is mentioned as having the highest risk

“California leads the most vulnerable states identified by Pew, which describes it as having poor money-management practices. According to the Legislative Analyst's Office, California has made nearly $60 billion in budget adjustments — in the form of cuts to education and social service programs, temporary tax hikes, one-time gimmicks and stimulus spending — since February as tax revenues plunged.
Many of those fixes aren't expected to last. The state's temporary tax hikes will begin to expire at the end of 2010, while federal stimulus spending will begin to run out a year after that.”--- AP (11/11/09, Lin, J.)

By estimates California will incur a huge deficit hovering at $12.4 billion and $14.4 billion next year. This may be about 17 percent of the state's $84.6 billion general fund budget that is used for daily operation. Governor Arnold Schwarzenegger predicts more budget cuts are in the offing as a corrective measure.

The poor economy is creating undue stress of many Americans. They are learning the hard way to live within their means. The public is realizing that USA can’t buy its way to prosperity (i.e. by extravagant stimulus packages, unbridled borrowing and spending) as what the current government is doing. The country under Pres. Barack Obama may go through extreme financial hardship if his economic planners don’t go slow in their flamboyance and cocky spending. In this financial crisis, the government should have little room for gimmickry and naive manipulation of the economy. (Photo Credit: library.thinkquest.org) =0=

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Labels: bankruptcy, budget, budget deficit, economy, Gov. Arnold Schwarzenegger, money, national economic planners, Pew Center, recession

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Money woes threaten the budget of at least 10 US states

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