After the news yesterday regarding California’s request for a $7 billion federal bailout, I ran across yet another indicator of declining state fiscal conditions. Nearly a QUARTER of states are now staring down budget shortfalls in excess of $1 billion, according to the Center for Budget & Policy Priorities. FY2009 State Budget Deficits over $1.0 billion, ranked by magnitude
- California: $22.2 billion (22.0% of FY09 general fund)
- New York: $5.5 billion (9.8% of FY09 general fund)
- Florida: $5.1 billion (19.9% of FY08 general fund)
- New Jersey: $2.5 billion (7.7% of FY09 general fund)
- Arizona: $2.0 billion (19.9% of FY09 general fund)
- Illinois: $1.8 billion (6.3% of FY09 general fund)
- Georgia: $1.8 billion (8.7% of FY09 general fund)
- Ohio: $1.3 billion (4.5% of FY09 general fund)
- Massachusetts: $1.2 billion (4.3% of FY09 general fund)
- Virginia: $1.2 billion (7.1% of FY09 general fund)
- Nevada: $1.2 billion (16.0% of FY09 general fund)
- Maryland: $1.1 billion (7.2% of FY09 general fund)
And if you think that’s bad, just check out a sampling of some major city budget shortfalls:
- NYC: $2.3 billion
- Chicago: $420 million
- L.A.: $400 million
- Atlanta: $140 million
Combine this with the tighter access to the muni bond market that I wrote on Thursday, and it becomes very clear that the government binge in recent years is coming to a grinding halt and that there is no way to avoid belt-tightening, streamlining, and innovative procurement strategies.