Rising tide of red ink
Anyone who thought state budget deficits were confined to one or two regions of the United States had a sobering wake-up call in the form of a report issued this month by the Center on Budget and Policy. The report indicates that the sea of red ink has now washed over no less than 44 states.
Nevada, Illinois, New Jersey, Texas and California lead the list of states in arrears, each compiling current deficits that amount to roughly one-third of their budgets. Nevada currently is facing a $1.5-billion deficit that is equivalent to 45.2 percent of the state budget; Illinois’s deficit is about $15 billion, or 44.9 percent of its budget; New Jersey weighs in at $10.5 billion, or 37.4 percent of its budget; Texas is facing a $13.4 billion gap, 31.5 of its budget total; and California, despite draconian budget cuts in the past two years, still has a $25.4-billion gap to close.
States that are closest to making ends, according to the center’s report, are Indiana, West Virginia, Montana, Iowa, and Massachusetts, which range from the Hoosier State‚Äôs 2 percent shortfall (approximately $270 million) to Massachusetts’ $1.8-billion deficit (5.7 percent of budget).
Proposed remedies include a bill reportedly circulating in Congress that will enable states to file for bankruptcy so they can renegotiate obligations like pension payments.