Which states are facing the worst budget deficits in 2010?
Many states fell into a fiscal hole in 2009, and continue to lag behind in economic recovery. A look at ten states facing the biggest budget problems in 2010.
The national economy may be in recovery, but most states haven’t yet hit bottom – and many are already facing massive budget gaps halfway through their fiscal year, despite basing those budgets on dismal forecasts.Skip to next paragraph
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“Unless you’re North Dakota, you’re probably a state that has had some degree of difficulty or crisis involving finances,” says Arturo Pérez, a fiscal analyst with the National Conference of State Legislatures (NCSL), which released its survey of state budget situations earlier this month. “It’s the worst situation states have faced in decades, perhaps going as far back as the Great Depression in some states.”
The result: furloughs, deep cuts to state programs and services, fee and tax hikes.
“The next couple of calendar years will be some of the worst in terms of the tough choices that elected officials will have to make,” says Scott Pattison, executive director of the National Association of State Budget Officers, adding that the stimulus funds that benefited states will soon be drying up, make the situation even more difficult. “There’s not a lot left to do that aren’t really really tough political choices.”
Heading into 2010, here are some of the states facing the toughest fiscal challenges:
California. The state has come to symbolize the budget crisis for many people, because of its massive shortfalls and the extreme measures the state has already been forced to take: mandatory furloughs for all state workers, teacher layoffs, aid to the university system reduced by 20 percent, and massive cuts to education, corrections, and social services. It already faces a $6 billion budget gap, and projections from the state’s Legislative Analyst’s Office show that by the time the state has to come up with its next budget, it will have a $20.7 billion budget gap on its hands. On the plus side, the outlook isn’t worsening, and state revenues appear to be stabilizing.
Oklahoma. Until recently, Oklahoma wasn’t doing too badly, helped by oil and natural gas prices. The big drop in those prices are one of the reasons the state is now facing a budget gap that’s 18.5 percent of its general-fund budget. Revenues for the first quarter of the fiscal year were 26 percent below the estimates.