The Great Recession is continuing to have an affect on the quality of life for U.S. citizens. This time, the death knell is being rung for a plethora of state services.
The beginning of July marked the new fiscal year for states, and with it came another reckoning between what we all want and what we can afford.
It's become a familiar comeuppance that started on the personal level when so many Americans had to come to terms with wanting a mansion and being able to afford a nice rancher. In the end, those who were unable to let go of their fantasies and turn toward a more fiscally responsible reality ended up watching their home being sold at auction.
It's amazing how powerful the desire is in America to put on a good show for the neighbors rather than do what's best for our immediate family. We have such a collective case of low self-esteem that we're willing to ignore very basic common sense about how much something costs and how much money we can reasonably predict we'll earn in the foreseeable future.
State governments have adopted the same kind of magical monetary policies and the bill has now come due in capitals all across the land.
A long list of projects and social services put in place during the heyday combined with continuing erosion in tax revenue has left 48 out of 50 states staring down a budget shortfall.
As of the start of the month, five states, Connecticut, Illinois, Pennsylvania, North Carolina and Ohio were still trying to figure out how to close the gap. California approved a budget in February, but due to a $24 billion dollar shortfall from a continuing decrease in tax revenues, they have had to go back and take another look. The state expects to begin issuing IOU's in coming weeks in lieu of payment.
All of the other states have put into place stopgap measures that will only hold things together for a few weeks, at best. After that, some tough decisions will finally have to be made.
This is a politician's worst nightmare, but the seeds of the problem were planted with full knowledge of what was likely to occur. Most of them just hoped it would happen far enough in the future that they'd be retired. New programs and expansion of services have been added to budgets over the years and were based on the theory that taxes would only increase as land values rose.
If there was a pullback from temporary job losses there would have to be some budget cuts, but they would only sting and not fatally wound. The idea that real estate could lose value, and on such a grand scale, apparently didn't occur to anyone. That's another little piece of magical reasoning.
State governments weren't putting any of the excess money earned during the fat years into an account to create an ample reserve to pay for the vital services during the lean years. Instead, they were spending down to the bone while creating an expectation for a longer list of services and a belief that the government is the ultimate safety net.
As it is, most of the states had to include bailout money also known as federal stimulus money in order to create a budget that lawmakers were willing to approve. However, according to the Center on Budget and Policy Priorities, most of these states will end up in the same predicament as California with new shortfalls too large to be ignored. The combined expected deficit is $166 billion dollars.
Legislators who want to create any kind of real change ought to be out telling their constituents the bleak truth right now and creating town forums to come up with creative alternatives. Any politician who fails to take action isn't doing his or her job.
Inaction won't put off the deletion of education programs or additional firefighters or a long list of other services. But getting everyone to accept the reality of our current economic condition could result in the beginning of a solution.
Martha's column is distributed exclusively by Cagle Cartoons Inc., newspaper syndicate. E-mail her at Martha@caglecartoons.com.