A new study is showing that many states are heading toward an economic mess. Everyone knows that California is facing a back breaking deficit. The state government decided to try and ease the predicament by increased borrowing but that hasn’t worked and they are facing astronomical deficits.
This debt will most likely indicate higher taxes, more layoffs of government employees, jam-packed classrooms, and a smaller amount of services in the nations most populated states. States facing the greatest budget deficits for the next year and many years to come consist of Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island, Wisconsin, and certainly California.
The Pew Center of the United States released a new study that showed double digit gaps in the budget along with mounting unemployment and thousands of home foreclosures. This study required lawmakers to take a practical look at the financial catastrophe and what measures should be taken in order to try and get the system back on track.
Although there were only 10 states that made this list they account for almost one-third of the American population. This is a huge deal and it affects every American whether you live in one of these states or not. Economies and states are so integrated and interconnected that it affects everyone.
Susan Urah stated “Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers.” California is the most vulnerable state on the top 10 but fellow states face the same difficulties California does. California at this time has nearly $60 billion in budget adjustments that must be changed. This presumably means cuts to education, social service programs, temporary tax hikes, as well as stimulus spending.
Governor Schwarzenegger estimates that the deficit for this year will run between $12.4 and $14.4 billion. But by the end of this year the governor will have have a spending plan in place. But, will this turn the economy around? Because of the global financial crisis in the last two years California has witnessed general spending decrease by $20 billion. Many Californians are questioning how they will face growing taxes and how their lives will change with all of the service cuts.
The government is telling residents that they have come a long way but extreme actions are still required. Previous cuts were frivolous and affected less people, but now government has to cut necessary funding which will affect large numbers of people. These will be the most painful cuts for Californians.
Hopefully California and the other nine states will be able to make budget cuts that will affect fewer people and that will finally turn their budgets around. These states still aren’t out of the woods but with some planning and scrimping they will most likely be able to turn around and get on the road to improvement. Which in turn, will improve the economies and budgets in not only these states but the rest of the nation.
About the Author Info
Diane Johnson earned a Bachelor of Science from the University of Utah and enjoys writing about current events, politics, college degrees, online education, and the office.
Diane Johnson earned a bachelor’s degree in Political Science from the University of Utah. She likes to write about the news, politics, college degrees, online education, and continuing online education.
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