Thursday, June 17, 2010

The state's bills go downhill

Various anecdotes and news reports have shown that as states become strapped due to lower tax receipts, unsustainable labor pacts, and the loss of certain federal money, they pass the costs down to cities, counties, and communities creating a downward spiral of budget gaps. Somehow the news to date, seen or heard here, had to do with counties or communities that could least afford it. The news is that it is happening everywhere. Today's local newspaper reported that our metro New York county's "required contribution to the State Pension Fund is expected to skyrocket by about 45%, or 43.6 million more next year". The math is a rise from $97 million in 2010 to $141 million in 2011.

State legislatures across the country must, by law, find ways to balance their budgets, but doing so doesn't solve the problem if the gap just moves to other smaller even less financially flexible jurisdictions. The credit crisis is far from over. Hello Greece, what's it like over there.


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