Study: Huge State Budget Deficits ‘Wreaking Havoc’

November 16, 2009

(ChattahBox)—A report released by the Pew Center warns of the impact that crushing state budget deficits will soon have on essential services, such as education, health care and fire and police services across the country. At a time of dwindling resources, making bare bones cuts to states’ budgets and laying off employees are no longer sufficient and the Pew study forecasts, further budget cuts “wreaking havoc” on the lives of Americans, at a time when people need the most help.

Susan Urahn, director of the Pew Center for the States warned of catastrophic budget decisions ahead for state lawmakers. “There’s no question this is extraordinary. The worst situation in 50 years,” said Urahn. “Fiscal year 2010 will be just as bad as it was last year. We saw a $180 billion cumulative budget gap in 2009 and predict the same for 2010.”

Although the dire financial condition of California has received the most media attention, the study points to 10 additional states that are experiencing the worst effects from the recession. Arizona for example, is facing a a $1 billion gap for its 2009 budget and the tiny State of Rhode Island, is suffering from some of the most highest unemployment and foreclosure rates in the country.

Michigan, Nevada, Oregon, Florida, New Jersey, Illinois and Wisconsin are all listed as states that are the most vulnerable to job losses, foreclosures and scarce resources. States, such as Oregon and Nevada also face legal obstacles to raising taxes to make up budget shortfalls.

Some beleaguered states, like New Mexico are resorting to state worker furloughs, rather that resort to mass layoffs.

Steve Kreisberg of the American Federal of State, County and Municipal Employees told ABC News that the dire budget deficits with no solution in sight could be “absolutely disastrous not just for state workers but for the entire economy.”

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