States Are Hit Hard by Economic Downturn

Nation: Women and children hardest hit by cuts.

"State budgets have been hit hard by a worsening national economy, including rising costs for energy and health care. In addition, fallout from the subprime mortgage crisis -- declining home sales, deflated property values and mounting foreclosures -- has caused a slide in states' anticipated tax receipts. Revenue from property taxes, sales taxes and real estate transfer taxes is affected. At least half of the nation's states are facing budget shortfalls, some of them severe, and policymakers in most of the states affected are proposing and passing often-painful measures to trim costs and close the gaps. Spending on schools is being slashed, after-school programs are being curtailed and teachers are being notified of potential layoffs. Health-care assistance is being cut for the elderly, the disabled and the poor. Some government offices, such as motor vehicle department locations, will start closing on weekends, and some state workers are receiving pink slips. Some analysts worry that the impact is being felt disproportionately by the most needy. "It's disappointing, the extent they tend to focus their cuts on the most vulnerable," said Iris J. Lav, deputy director of the Washington-based Center on Budget and Policy Priorities, a liberal think tank that monitors state budget issues. "It does appear to disproportionately affect low-income people." Unlike the federal government, which can run deficits, almost all states are required by their own laws and constitutions to balance their budgets. Many states are just now hammering out their budgets, so some targeted programs could still be saved in last-minute negotiations. In most states, talk of raising taxes has become politically perilous, particularly with residents already hurting from falling housing values and a worsening economy. Only half a dozen states have approved, or are considering, tax increases, including Maryland and Michigan, both of which raised taxes in 2007. In New Jersey, which has a $3 billion deficit, Gov. Jon S. Corzine (D) has proposed eliminating or reducing most property tax rebates. In New York, facing a $5 billion shortfall, an idea in the General Assembly for a new income tax for people making more than $1 million per year died last week after the Republican-controlled Senate, and Gov. David A. Paterson (D), strongly opposed it. Instead of raising taxes, most states with shortfalls are curtailing services, and the effects are already being felt nationwide. Some of the most dramatic cuts are being made in California, Maine and Rhode Island, according to budget experts, with New Jersey not far behind." ....A recent 50-state survey by the Associated Press showed that hundreds of thousands of poor children, the disabled and the elderly stand to have their health coverage eliminated as a result of budget cuts, and more than 10 million people would lose access to dental care, specialists and name-brand prescription drugs. Budget experts said they see a repeat of the pattern that happened during the recession of 2001: States generally cut health services and medical benefits first, because these costs are often rising more rapidly than others, and the savings tend to be immediate. Subsidies to higher education are also a favored target for budget cuts -- mainly because policymakers often believe that universities can find money from other sources, such as private donations or higher tuition.

Governments are crack heads and tax revenue funds the spending addiction. None of these state thought maybe the booming economy and higher tax revenue may come to an end, perhaps we should think about saving and more importantly not spending so much.

Instead wash, rinse and repeat. Money comes in, spending skyrockets, economy goes down, tax revenue falls and now moaning and crying because they were not fiscally responsible in the first place.