Saturday, August 2, 2008

ECONOMY HITTING STATES HARD

MSNBC - Gov. Arnold Schwarzenegger is laying off as many as 22,000 state employees. New York's governor is raising the possibility of selling - or more accurately, leasing - the Brooklyn Bridge. Nevada is burning through its rainy-day fund like a gambler on a losing streak. And Maryland is pinning its hopes on slot machines. With the economy in a slide and the housing market in crisis, states are collectively rolling up tens of billions of dollars in budget deficits in one of the worst financial crunches in the U.S. since the 1970s. . . Worse, economists say the red ink is only going to get deeper later in the fiscal year when 2008 tax returns start coming in. "The big question is when will states hit the bottom? We don't know," said Arturo Perez, a fiscal analyst with the National Conference of State Legislatures in Colorado. As of June, more than 30 states faced deficits totaling a projected $40 billion, or more than triple the gap of the previous year, according to the NCSL.

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