Fiscal crisis of the states
The 50 U.S. states are facing, in the midst of the Second Great Depression, a profound fiscal crisis.
That much is clear from a new report by the State Budget Crisis Task Force, chaired by Richard Ravitch and Paul Volcker. Their argument is that the current fiscal crisis will persist long after (or if) the national economy rebounds as the states confront rising health care expenditures, underfunded pensions, ignored infrastructure needs, eroding revenues, and expected federal budget cuts. While the authors of the report fail to propose any real solutions (apart from the need for more “transparent, accountable state government finances”), they do include two important observations.
First, while state government education—related primarily to public higher education—has continued to rise, states have been shifting the costs of this employment. They have cut back substantially on appropriations for higher education, and public colleges and universities have been forced to respond…
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