State governments across the US are facing record budget deficits in the upcoming fiscal year (FY) 2012 that begins July 1, 2011 in most states. Altogether, total state shortfalls could exceed $140 billion in FY 2012. The biggest deficits look to be in California, Nevada, Illinois, New Jersey, and Texas — states that have seen big reductions in revenues because of the collapse of the financial and housing markets. In these states, the deficits range from 30 to 45 percent of the total state budget.
Governors across the country are scrambling to put together a combination of budget cuts and tax increases that will further erode economic growth and lead to even larger deficits. The impact of budget reductions in these states will be lay offs and/or reductions in the salary and benefits of public servants — mostly teachers, police, firefighters — and will further erode housing prices and state revenues. $140 billion is just a fraction of the amount the federal government has spent to bail out Wall Street special interests and allow financial institutions to make record profits this year and pay out record bonuses to millionaire CEOs and investment fund managers.
It’s time for us as citizens to stand up and demand that the people who teach our children and keep us safe are not the ones who should be asked to pay the price for the greed and corruption on Wall Street. Call your representatives in Congress and demand that the federal government work with states to help them balance their budgets. Timely federal action can head off the looming downward economic spiral, and save jobs and homes across the country.
