Study: Nine states risking California-style 'fiscal peril'

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A new study from the non-partisan Pew -- "Beyond California: States in Fiscal Peril" -- looks at nine states that the organization asserts aren’t far behind the Golden State in suffering havoc from the Great Recession. The nine, alphabetically: Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

The Pew scored all 50 states based on six factors that "contributed substantially to California’s ongoing fiscal woes": high foreclosure rates; increasing joblessness; loss of state revenues; the relative size of budget gaps; legal obstacles to balanced budgets (specifically, a supermajority requirement for some or all tax increases or budget bills); and poor money-management practices.

California, of course, scored worst of all, but it was closely followed by Arizona, Rhode Island and Michigan, in that order.

Considering that Arizona and Nevada, in particular, might be expected to benefit as business refuges from California’s nightmare, here’s what the Pew study has to say about those two states:

--- Arizona: "As the economic news grew bleaker and state revenues sank during the past two years, Arizona’s lawmakers relied on one-time fixes to balance its budget instead of making long-term changes. In part, they were hamstrung by voter-imposed spending constraints, a tax structure highly reliant on a growing economy and a series of tax cuts, made in the 1990s, that has limited revenue. At this writing, policy makers still had not decided how to bridge a $1 billion gap in the current fiscal year’s budget."

--- Nevada: "Nevada’s unique gaming-based economy is in jeopardy, as its state budget relies on gambling and sales taxes to provide 60% of its revenues. Year-over-year revenue has fallen for two consecutive years, a record. But changes to the tax system are difficult to make because, unlike most states, Nevada has written some of its tax laws into the state constitution. So increasing the sales tax or adding an income tax, for example, would be nearly impossible because it requires voters to amend the constitution."

And what did Wisconsin, California’s dairy rival, do wrong to get on the Troubled-10 list?

"The recession has hit Wisconsin harder than most state governments, especially when it comes to lost tax revenues and the size of the hole in its budget," the Pew study says. "Wisconsin’s history of budget shortfalls and pattern of borrowing frequently to cover operating expenses, among other measures, made it poorly positioned to weather the most recent severe economic downturn."

http://latimesblogs.latimes.com/money_co/2...ona-nevada.html

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--- Arizona: "As the economic news grew bleaker and state revenues sank during the past two years, Arizona’s lawmakers relied on one-time fixes to balance its budget instead of making long-term changes. In part, they were hamstrung by voter-imposed spending constraints, a tax structure highly reliant on a growing economy and a series of tax cuts, made in the 1990s, that has limited revenue. At this writing, policy makers still had not decided how to bridge a $1 billion gap in the current fiscal year’s budget."

Yep.

[AlHayatZween 2]

Not surprised about NJ...

you guys better get it together over the next 2 years so i can move back !!

[w¡n9Nµ7 §£@¥€r 123]

Not surprised about NJ...

you guys better get it together over the next 2 years so i can move back !!

Just move to NEPA, everyone else is.

[AlHayatZween 2]

Not surprised about NJ...

you guys better get it together over the next 2 years so i can move back !!

Just move to NEPA, everyone else is.

Sorry, what's NEPA?

[mawilson 2,133]

Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin

No immediate correlation between the state and local tax burdens and their budget deficits,

though 4 out of 10 states are in the top 10:

Arizona: 8.5% (rank: 41)

California: 10.5% (rank: 6)

Florida: 7.4% (rank: 47)

Illinois: 9.3% (rank: 30)

Michigan: 9.4% (rank: 27)

Nevada: 6.6% (rank: 49)

New Jersey: 11.8% (rank: 1)

Oregon: 9.4% (rank: 26)

Rhode Island: 10.2% (rank: 10)

Wisconsin: 10.2% (rank: 9)

[one...two...tree 2,762]

Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin

No immediate correlation between the state and local tax burdens and their budget deficits,

though 4 out of 10 states are in the top 10:

Arizona: 8.5% (rank: 41)

California: 10.5% (rank: 6)

Florida: 7.4% (rank: 47)

Illinois: 9.3% (rank: 30)

Michigan: 9.4% (rank: 27)

Nevada: 6.6% (rank: 49)

New Jersey: 11.8% (rank: 1)

Oregon: 9.4% (rank: 26)

Rhode Island: 10.2% (rank: 10)

Wisconsin: 10.2% (rank: 9)

Ballot initiatives, at least in California, tie the hands of the legislature on key expenditures like schools and transportation. Combine that with requiring a super majority to raise taxes and those two factors alone create a deficit problem for the state.

Edited November 13, 2009 by Galt's gallstones

[w¡n9Nµ7 §£@¥€r 123]

Not surprised about NJ...

you guys better get it together over the next 2 years so i can move back !!

Just move to NEPA, everyone else is.

Sorry, what's NEPA?

northeastern pa