Thursday, July 1, 2010

State Budgets Spiral Downward

Fifty states with a total of $89 billion in state budget deficits mean cuts this fiscal year of as many as 900,000 government employee jobs and jobs at companies doing business with state and local governments. Even with Obama's wished for $50 billion federal aid to state and local governments, which now appears doomed to nearly certain failure in Congress, state and local governments, and the businesses depending on them for survival, would lose nearly 395,000 government and private sector jobs in the last half of 2010 and the first half of 2011. State governments already cut 200,000 jobs in 2009 and the first half of 2010.

Employment losses have already meant drastic cuts in state and local tax revenues. In Illinois some sate government bills 8 months old still go unpaid, according to Illinois Comptroller's office spokesman Alan Henry. More layoffs will mean more revenue losses, and the downward spiral in state and local government employment and services will continue unabated for years to come.
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