Cash-strapped states start a new fiscal year

Submitted By Tim Iacono
California leads a gaggle of states that entered a new fiscal year on Wednesday with no viable plan to fund their spending. The AP reports that Florida, Oregon, North Carolina and other states have similar problems, though none quite as severe as in the "Golden State".

Several states are facing the prospect of government shutdowns and program cuts as they enter the first weekend of the fiscal year and July Fourth holiday without a budget in place.

"This downturn, even more so than previous downturns, really is affecting every state right now," said Brian Sigritz, a staff associate with the National Association of State Budget Officers.

The Washington-based organization says 42 states wrestled with budget deficits this spring, the most since it began tracking budgets 30 years ago.

States weathered similar problems in the recessions of the early 1980s, 1990s and earlier this decade. The confluence of so many problems hammering the economy at once make the present situation seem dire.

Until home prices stop falling and unemployment stops rising, there doesn't appear to be any improvement on the horizon.

Pennsylvania and Ohio seem to have problems as well. Hopefully, it's just a coincidence that I've lived in three of the states mentioned in this story - Pennsylvania, California, and Oregon.

Pennsylvania schools still don't know how much state money they'll receive and may have to reopen their budgets to add or subtract spending. The state's budget year began Wednesday with no sign of a deal between lawmakers and Gov. Ed Rendell.

Ohio Gov. Ted Strickland and lawmakers are stymied over a proposal to allow casino-style gambling to raise money. As a result, the state started its budget year with a one-week temporary budget.
...
"This budget impasse is impacting real Ohioans," said Lisa Hamler-Fugitt, executive director of the Ohio Association of Second Harvest Food Banks. "People for the first time in their lives are now finding themselves standing in the food line because they've lost their jobs, their incomes aren't stretching."

This cartoon by R.J. Matson is really starting to grow on me...