States Are Hit Hard by Economic Downturn

[flashl]

Source: Washington Post


Many Cutbacks Felt by Most Needy

NEW YORK -- In Illinois' Cook County, women in poor neighborhoods no longer have access to free mammograms from two mobile vans testing for breast cancer.

In Michigan, hikers will find about 20 campgrounds closed, and scientists are ending their studies of fish populations in the Great Lakes.

...

And in California's San Fernando Valley, Everardo Orozco, 53, who has AIDS, exhausted his medical benefits and can no longer afford the drugs that are keeping him alive.

At least half of the nation's states are facing budget shortfalls, some of them severe, and policymakers in most of the states affected are proposing and passing often-painful measures to trim costs and close the gaps. Spending on schools is being slashed, after-school programs are being curtailed and teachers are being notified of potential layoffs. Health-care assistance is being cut for the elderly, the disabled and the poor. Some government offices, such as motor vehicle department locations, will start closing on weekends, and some state workers are receiving pink slips.

Washington Post

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/03/30/AR2008033002138.html?hpid=topnews

---

State budgets that could find creative means to fully service the needy is where financial alchemy would be appreciated.

[Double T]

1. At least the stinking filthy rich and the corrupt criminal corporations have been saved and.......

preserved, while the true needs and truly needy will be forgotten and lost.

[bdamomma]

6. is it time for pitchforks and torches yet? or do we have to be abused

from this thuggish regime more?

[Bonobo]

2. My small town has a 1.5 million deficit in school budget.

We are a well-off town. But they will have to close an entire school here.

We are pretty screwed up. This will be very bad.

[flashl]

4. Wall Street's financial gamesmanship didn't just target the poor in subprimes

There are an abundance of recent stories describing the same subprime ARM surprise scenario where the 'marks' were school boards, county governments, and states ....

Jefferson County's ultimatum to Wall Street banks carries risks for both sides

Proposal would put banks on hook

Jefferson County's ultimatum to Wall Street banks to accept a proposal for paying part of its $3.2 billion sewer debt comes with risks for both sides, say two finance professors and a longtime bankruptcy lawyer.

Bondholders annually would get $115 million from sewer revenue and at least $27 million in excess revenue from the 1 percent education sales tax, under a county proposal to solve the worst financial crisis in the county's history.

The Legislature would have to approve using the excess from the increase enacted in 2005 to pay off money borrowed for school construction.

Commission President Bettye Fine Collins has acknowledged that the extra revenue may not pay creditors in full.

Wall Street's robbery of the states, counties, and school districts is being ignored.

[xchrom]

3. recommend

[redqueen]

5. I hope Americans remember this time. Stop electing con-men already.

How many times will we allow the corporate party to screw things up so badly?

[sutz12]

7. Mission Accomplished

It's not just the federal government the Pubbies are trying to dismantle.

They want to slash gov't at all levels.

[Igel]

8. I watched this happen twice before.

Once in California and once in New York.

In both cases, I moved to the state at the beginning of a recession. I watched all the squealing as the state legislatures and county commissioners tried to deal with the budget shortfalls. They all tried to get more money from the next level up, with cutting costs as a last resort. (I also watched the state college I was at in California face a cut in state support--it's reaction was to borrow to finance their deficit, convinced that the following year the money would be reinstated with some additional funds; they were wrong, and in year two of the budget cuts they had to cut more deeply than they would have otherwise.)

A few years later, in both cases, the recession ended. Revenues started to increase, and the states and counties spent every last cent they got. There were voices calling for moderation: Channel some of the money to a savings account and make only moderate increases, so that when the next recession hits there's a good chance that the savings can fill the gap between expenses and revenue. Mostly politicians said "good idea", but in preparation for the next election year they gutted the nascent savings accounts to show that they were bringing home the bacon for their constituents. (I view a lot of that kind of spending as buying votes.) When revenues increased over the previous record levels, they committed every cent. Most of the money didn't go to one-off ventures, but to two kinds of things: entitlements or continuing programs, or to projects that even when 'paid for' would still incur continuing costs. Since they budget not real dollars but projected dollars, the first year of a down-turn is the hardest: By the time they're compelled to acknowledge the downturn, it's late in the year so, as with that college, cuts have to be deeper than they'd be otherwise.

So now that income's taken a nose-dive, of course they're going to scream. It's like a family who gets 5 hours of overtime a week, COLA adjustments, and a large Xmas bonus for 3 years running, and spends every cent on 'essentials'. They even spend in advance, counting on that year-end bonus. There's no wiggle room in their budgets for when overtime's reduced and the Xmas bonus goes bye-bye. It's fiscally irresponsible. In other words, SOP, politics as usual, regardless of party.