Wednesday, March 19, 2008

Stateline: The Eve of Recession Leaving State Budgets in Tatters

A conservative nirvana of social Darwinism is descending on state budgets and odds are that weakest links are going to be the first big group of losers:

the current billion-dollar holes in budgets are real, and filling the gaps could mean painful cuts to programs, not just this year, but for several more .... some 7,000 mentally ill and elderly in Maine could be dropped from Medicaid, the state-federal health program that serves 59 million needy, while Medicaid recipients in Vermont may face a higher co-pay.

Arizona is considering eliminating child-care subsidies for 3,200 children in low-income families, and college students in Iowa and Pennsylvania will have to find student loans through private banks as the credit crunch led those two states’ lending agencies to suspend programs ....

Florida is ... slashing more than $1.5 billion in the last five months, including $512 million in March from public schools and juvenile justice programs. And the cutting isn’t over. The Sunshine State finds itself facing a $3.7 billion deficit for the next fiscal year, which starts July 1.

Only a few states that rely on oil, natural gas, ethanol, and coal don't face this apocalyptic scenario. But what happens when those from the revenue-strapped states start flocking to the oil rich states to take advantage of their services? Budgetary evaporation and mutually-assured calamity (unless Wyoming constructs a wall to keep people out).

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