A report from the Pew Center on the state economies Wednesday stated that beside California, “at least nine other big states are also barreling toward economic disaster.”
The states verging toward financial ruin include many large and populous states such as Illinois, Florida and Michigan. The report said these states must take decisive action now to avoid “wider catastrophe.”
As the national economy has sunk, states have seen their sales and property tax revenues sharply decline, while the demand for social services, particularly for poverty relief programs, has grown. The result has been a widening chasm in state budgets.
In Illinois and California in particular, the budget gap — the difference between state revenue and its expenses — has ballooned past 40 percent. This level of spending is unsustainable.
California has already been reduced to issuing IOUs, Michigan has slashed spending for public schools and Arizona is working on a plan to mortgage its Capitol buildings to raise funds.
Many of these states had been headstrong in their unfounded belief that the national economy would quickly recover, raising state tax revenues back to normal, and therefore allowing them to avoid sharp cuts.
In Arizona, Michigan and California, time has run out. Their funding sources dried up before the economy recovered, and now devastating cuts to needed social services have been the unfortunate result.
The sad truth is that we in Colorado aren’t much better off. We haven’t fallen to the depths these 10 particularly decimated states have reached yet, but we’re getting there.
We’ve already cut higher ed funding to unthinkable levels while accidentally releasing a sex offender early to save money.
Coloradoans must get their heads out of the sand before we have an economic disaster equal to what has hit 10 of our fellow states.