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US: State budget crises trigger layoffs, cuts in social programs [View All]

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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jun-25-09 12:22 AM
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US: State budget crises trigger layoffs, cuts in social programs
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State governments are facing unprecedented budget shortfalls as the fiscal year draws near its June 30 close. In response, governors and state legislatures are slashing social programs and laying-off state workers.

Collectively, the states confront a fiscal deficit of $121 billion for the coming year....The two-year states deficit is upwards of $225 billion, $81 billion more than what President Obamas stimulus package, the American Recovery and Reinvestment Act, allocated to all municipalities and the 50 states for the next two years.

According to a recently released analysis by the Nelson A. Rockefeller Institute of Government, state-level income tax collections fell a staggering 26 percent in the first quarter of 2009 compared to the previous year.

At the same time, 23 of the 30 most populous states have seen a significant increase in their welfare caseloads, a Wall Street Journal and National Conference of State Legislatures report reveals.

Use of the Food Stamp Program, a more sensitive barometer of worsening social conditions, is at an all-time high. And states are now responsible for more than $6.5 billion in monthly unemployment checks, siphoning so much money from states trust funds that all but a few have borrowed money from the federal government already or will soon need to, notes.

Budget crises have triggered sharp political tensions in state capitals, the New York Times notes. In Illinois, Democratic legislators are rebelling against Democratic Governor Patrick Quinn and his call for a modest increase in personal income taxes.

In Massachusetts, the Democratic governor, Patrick Deval, is threatening to veto a proposed sales tax increase authored by the Democratic-controlled legislature.

In Arizona, Republican Governor Jan Brewer is suing the Republican-controlled legislature before the Arizona Supreme Court in an attempt to compel it to submit a budgetso that she can veto it.

In Minnesota, Republican Governor Tim Pawlenty has declared he will act unilaterally to enact cuts totaling $2.7 billion from nearly all government agencies and social programs after failing to reach a compromise with the Democratic-controlled legislature.

There is, however, broad agreement among all factions of the state-level political elite that it is the working class that must foot the bill for the economic crisis, either through regressive forms of taxation or through cuts to social services and education, or both. There is no evidence from any of the 50 states that governors and legislatures are contemplating large-scale tax increases on the extremely wealthy or seizing the assets of the major banks that precipitated the economic crisis.
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