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Deficit Nation - State Deficit Projections For 2010

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The Center for Budget and Policy Priorities has released its projected deficits for 2010. While California leads the pack in terms of headlines, it should be noted that New York isn't far behind.
Examining the data behind the chart it is staggering to me that only 4 states are not running deficits. Montana, Wyoming, Alaska, North Dakota. With the exception of South Dakota (with a paltry 32 million) all other states have a projected deficit of 100 million or more. I was disappointed to see that New Hampshire which is libertarian land, is projected to be 250 million in the hole, an increase of 50 million over 2009.
Unlike the federal government states cannot print money so it will be interesting to see how they intend to close the gap. California is planning on extorting the funds from its populous by raising taxes, attempting to raid protected funds, and cutting core services until the public screams for mercy. At the same time California is pleading for a federal bailout. New York is doing the same thing.
Both states are fairly business hostile, and offer high levels of social assistance. It is of little surprise that they are running a deficit. If you openly antagonize the producers in the state, but still pay large sums of money to the non producers, thats a recipe for disaster. Keep a good eye on California, the sums of money in play are enormous, and they will be the bellwether for the rest of the deficit nation.
Federal assistance will make matters worse in the long run as the Center reports. The assistance will reduce the incentive for the states to make the needed cuts for long term survival. The American Recovery and Reinvestment act does have 135 billion ear marked for state bailouts, but that is about 1/2 of the projected shortfall for 2011.
Sadly that same report indicates that by 2011 48 out of 50 will have budget shortfalls.