Everyone is cutting back now that we’re in a recession, even the government. You might want to know what this means for you, but also how it is going to affect your community and neighbors – it isn’t that great.

• States are experiencing huge budget deficits because the recession has slashed their tax revenues by billions of dollars. To close these budget gaps, states are proposing and approving policy measures that would never otherwise be considered.
• Many state governors and legislatures are not able to come to a consensus and so several states are still struggling to approve a budget for next year.
• Even if the recession were to quickly end, states would continue to experience budget shortfalls for many years because of high unemployment, lower tax collections, and increased demand for government safety net programs.

Facts & Figures

• In the 2010 fiscal year, states will have a $121 billion budget gap.
• Budget schemes include taxing candy and cellphone ring tones, releasing prisoners early, increasing sales taxes, selling state parks, and having state workers work for free three days a month.
• Governors have proposed increasing taxes by roughly $24 billion dollars for the 2010 fiscal year.

Best Quote

“We still don’t know how bad it will be. The story is yet to be told, because in the next couple of weeks we will see some of the states with the biggest gaps have to wrestle this thing to the ground and make the tough decisions they’ve all been dreading.” – Susan K. Urahn, Managing Director of the Pew Center on the States