States in Crisis: 46 out of 50 States are virtually Bankrupt.
Dire Straits’ song “Money for Nothing” reflects the sentiments of a frustrated blue collar worker who is peeved at the artists he sees on MTV dancing, singing, wearing makeup and looking pretty, essentially getting “money for nothing and their chicks for free.”
The song sums up the frustration of some over government workers who they perceive as not working as hard as private sector workers. Government workers have job security, and that may frustrate those who have lost their jobs in the private sector as the economy slumped.
The angst is heating up and is now being filtered towards unions that represent these workers, especially now as so many states are considering going into bankruptcy. They are forbidden from doing so because of federal law, yet, what to do to deal with the deep deficits these states are in…They have to meet basic expenses AND pay millions of dollars to pensioners.
The Center on Budget and Policy Priorities estimates that there are 46 states with high budget deficits:
The Center writes:
The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. State tax collections, adjusted for inflation, are now 12 percent below pre-recession levels, while the need for state-funded services has not declined. As a result, even after making very deep spending cuts over the last two years, states continue to face large budget gaps. At least 46 states struggled to close shortfalls when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states). These came on top of the large shortfalls that 48 states faced in fiscal years 2009 and 2010. States will continue to struggle to find the revenue needed to support critical public services for a number of years, threatening hundreds of thousands of jobs.
Read more. Click here for a full PDF of its report
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