01/24/2009 - The rapidly deteriorating economy has confronted states with their toughest budget decisions in years. This month, about 45 states reported budget gaps for the present fiscal year and most expect to struggle with shortfalls over the next two years.
The Center on Budget and Policy Priorities says that these deficits could reach $350 billion. Individual budget gaps could be quite large — at least a 10 percent difference between income and spending in New York and five other states this year. Since a majority of state constitutions require balanced budgets, the only alternatives are to raise taxes or cut spending.
To cope, many states are spending less on health care and education, which take up a large percentage of most state budges. But the bottom line is that there are few good choices and a lot of very bad ones, since services would be cut at the moment of greatest need.
Read the full editorial Helping States Make Good Choices on the New York Times' Web site.