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Arizona Next, Rhode Island, Alabama, Florida not far Behind – State Budget Troubles Worsen

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posted on Feb, 2 2009 @ 04:36 PM
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“States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.”

The following states are the top five troubled states in terms of 2009 budget gap (revenues vs. expenses). The 2009 fiscal year for states is half over. As you can see, Arizona is right up there with California and Rhode Island, Alabama and Florida are not far behind. Unlike the federal government, most states have laws that prohibit the state government running a deficit which means one of two things… 1.) draw down on the individual state reserve funds (a certain percentage of reserve is also mandated by law) or if they don’t have enough, 2.) cuts in spending. The 2010 projected budget gaps are better but - considering they are estimates that haven’t taken into account the realities of even more unemployment coming and the reduced tax revenue resulting from the increased unemployment, I would say 2010 will be dire as well.

Total Gap as Percent of FY2009 General Fund
California: 35.5%
Arizona: 34.8%
Rhode Island: 24.5%
Alabama: 22.2%
Florida: 22.2%

Total 2009 Budget Gap
California: $35.9 billion
Arizona: $3.5 billion
Rhode Island: $802 million
Alabama: $1.8 billion
Florida: $5.7 billion

State Budget Troubles Worsen

The vast majority of states cannot run a deficit or borrow to cover their operating expenditures. As a result, states have three primary actions they can take during a fiscal crisis: they can draw down available reserves, they can cut expenditures, or they can raise taxes. States already have begun drawing down reserves; the remaining reserves are not sufficient to allow states to weather a significant downturn or recession. The other alternatives — spending cuts and tax increases — can further slow a state’s economy during a downturn and contribute to the further slowing of the national economy, as well.

For example, at least 26 states have implemented or are considering cuts that will affect low-income children’s or families’ eligibility for health insurance or reduce their access to health care services. Programs for the elderly and disabled are also being cut. At least 22 states and the District of Columbia are cutting medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or significantly increasing the cost of these services.

If revenue declines persist as expected in many states, additional budget cuts are likely. Budget cuts often are more severe in the second year of a state fiscal crisis, after reserves have been largely depleted and thus are no longer an option for closing deficits. The experience of the last recession is instructive as to what kinds of actions states may take. Between 2002 and 2004 states reduced services significantly. For example, in the last recession, some 34 states cut eligibility for public health programs, causing well over 1 million people to lose health coverage, and at least 23 states cut eligibility for child care subsidies or otherwise limited access to child care. In addition, 34 states cut real per-pupil aid to school districts for K-12 education between 2002 and 2004, resulting in higher fees for textbooks and courses, shorter school days, fewer personnel, and reduced transportation.




posted on Feb, 2 2009 @ 04:43 PM
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Oh yes, kill health care for poor kids that's a good idea. Why not start with the military. Cut the nukes out to a manageable level, pull back the empire, and cut spending on needless programs. Kick the illegals out who are a drain(Especially in California, Texas, New Mexico, and Arizona).

They must WANT civil unrest.



posted on Feb, 2 2009 @ 04:47 PM
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Originally posted by projectvxn
Oh yes, kill health care for poor kids that's a good idea. Why not start with the military. Cut the nukes out to a manageable level, pull back the empire, and cut spending on needless programs. Kick the illegals out who are a drain(Especially in California, Texas, New Mexico, and Arizona).

They must WANT civil unrest.


Remember, these are State governments... no military to cut back. Illegals? Well now, that's a different story!



posted on Feb, 2 2009 @ 04:54 PM
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Here is what they are doing to Arizona, some exerts:

The plan's cuts and sweeps would force layoffs and short-term furloughs for state workers, close some state parks, eliminate a welfare program for disabled people waiting for Social Security benefits and require low-income people getting subsidized health care to pay new monthly premiums. Others would force universities to increase class sizes and shutter some academic units, and K-12 public schools also would have to tighten their belts::

Now the schools here Casa Grande are a rural area, they are cutting us off, look at this:

The Casa Grande Elementary School District probably will have to cut $800,000 from this year's budget because of the state budget deficit.
The district already has a strategy for cutting $800,000 from this year's budget:

-- Using the budget balance at the end of this fiscal year. There is usually some money left over on June 30 to roll into the next budget.

-- Leaving all vacant positions unfilled or filling them with temporary help.

-- Shutting down the schools for four or five weeks this summer to save the cost of cooling and lights. Principals will work at the district office or at home. Each school will be open roughly one week during the summer so custodians can clean it.

-- Limiting summer school to seventh- and eighth-graders who need credits to be promoted and compressing 16 half-day sessions into eight full-day sessions.

-- Suspending all capital expenditures (paper, pencils, computers, furniture, school buses) except those that affect health or safety::

As if the schools are not bad enough here, half days every two weeks,
4 day school weeks, and now they want to close in the summer, and will stop summer school. Our property taxes that went for schools will now go to close the state gap . How nice. Our children are not only paying in money, but in their education.






[edit on 2-2-2009 by amatrine]



posted on Feb, 3 2009 @ 06:34 AM
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It seems like alot of these cuts will take out of the State budgets alot of the things that are in Obama's stimulus plan. There are two problems with this. First, it takes control of these things from the State government and gives it to the Federal government. Very dangerous IMO. The further the funding is from the people who are to benefit from it, the more cheating that occurs. Also, the people in the State governments have alot more knowledge of what's needed for the people of that particular State. Second, in reading the stimulus plan, I noticed that alot of the stimulus intended to "help" States, is only there as a percentage of the amount of aid the State actually funds itself. So, if the States have to cut that program from their budget, then the Federal money for that program won't be available to the States.

The people are really going to suffer and it seems like the children always suffer the most.



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