Commentary

Hey, Big Spenders

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

  1. California: $22.2 billion (22.0% of FY09 general fund)
  2. New York: $5.5 billion (9.8% of FY09 general fund)
  3. Florida: $5.1 billion (19.9% of FY08 general fund)
  4. New Jersey: $2.5 billion (7.7% of FY09 general fund)
  5. Arizona: $2.0 billion (19.9% of FY09 general fund)
  6. Illinois: $1.8 billion (6.3% of FY09 general fund)
  7. Georgia: $1.8 billion (8.7% of FY09 general fund)
  8. Ohio: $1.3 billion (4.5% of FY09 general fund)
  9. Massachusetts: $1.2 billion (4.3% of FY09 general fund)
  10. Virginia: $1.2 billion (7.1% of FY09 general fund)
  11. Nevada: $1.2 billion (16.0% of FY09 general fund)
  12. 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.

Leonard Gilroy is vice president of government reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets. He also serves as senior managing director of the Pension Integrity Project at Reason Foundation, which assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.