Cutting Government Workers and Raising Taxes

On the side of appropriate reactions to the economic downturn, many states are cutting their workforce, even accounting for “stimulus” spending.

Already, 16 states downsized their staffs in fiscal 2009, which for most ends on June 30, according to a report last week from two state industry groups. Another 17 states are planning reductions for fiscal 2010.

Some 17,000 state workers have lost their jobs and another 98,000 layoffs have been proposed, according to a compilation by the American Federation of State, County and Municipal Employees, a labor union.

On the other hand, most states are considering tax hikes totalling about $24 billion, half of which is in California.

Some 29 states are recommending tax and fee increases for the coming fiscal year.

California, which is struggling to close a $21.3 billion budget gap, accounts for $11.3 billion of the hike. Illinois makes up another $4.4 billion, while New York is proposing $4 billion in additional levies.