Tuesday, September 30, 2008

STATES ACT TO CUSHION WALL STREET MELTDOWN

Stateline - Cascading economic problems flowing from the crisis on Wall Street are forcing states to urgently redraw their financial blueprints for the rest of this year and next to cushion the impact of the credit squeeze, staggering paper losses for millions of ordinary Americans and soaring energy prices.

California, which just ended a record 85-day budget impasse, fears its newly-approved plan to balance its books is already $1 billion in the red. Utah cut most state agency budgets by 3 percent in a Sept. 24 special session, and Oregon Gov. Ted Kulongoski (D) has rescinded a 3.2 percent pay raise for agency directors in his state.

In New York, the epicenter of the financial cataclysm, Gov. David Paterson (D) is laying the groundwork for a special legislative session to deal with conditions that he expects will add $1 billion to the state's $6.4 billion deficit. New York, along with New Jersey and Connecticut, will be hard hit by the layoffs of thousands of financial industry employees - by some estimates, the financial sector accounts for as much as one-fifth of their revenues.

Article includes rundown of recent state actions to deal with the emergency

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