Good News! We’re Not as Bad Off as California, Oregon . . .November 12th, 2009 by Steven Gardner
Got a report to tell you about, but first let’s dig into some context.
Like any educated citizen, I rely on talk radio for much of my information.
Earlier this year one host in particular was making the case
deficit budget shortfall was
actually worse than California’s, because per capita it was higher,
or close to it, or something. I suspected the talker might
astonishingly be incorrect about that, but the Seattle Times backed him
up, kind of.
Turns out he was incredibly wrong.
My suspicion about it was based on the notion California had reached its $42 million hole after years of dealing with other holes. So, if after years of wrangling and cutting everything we could we were still left with the same hole we had last year, then that would be a California-sized problem. That makes the talker wrong, but not incredibly so.
The incredible part comes in once you realize California’s budget is done every year. Washington’s is for every two years. So take Washington’s deficit and divide by two. Uh oh.
It still might be bad, but it’s not California bad.
So now the Pew Center on the States, a think tank that studies state issues, listed 10 states that are “in fiscal peril.” Guess what! Washington isn’t on the list!
If you look at the study itself this is not to suggest Washington is in good shape, it’s just not among the worst 10. It is tied with three states for 14th. From the press release for the study:
California’s financial problems are in a league of their own. But the same pressures that drove the Golden State toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.
This examination by the Pew Center on the States looks closely at nine states, in addition to California, that are particularly affected by the recession. All of California’s neighbors–Arizona, Nevada and Oregon–and fellow Sun Belt state Florida were severely hit by the bursting housing bubble, landing them on Pew’s list of states facing fiscal difficulties similar to California’s. A Midwestern cluster of states comprising Illinois, Michigan and Wisconsin emerged, too, as did the Northeastern states of New Jersey and Rhode Island.
From the press release you can download the study if you like.
Pew compiled its list based on high foreclosure rates,
increasing joblessness, loss of state revenues, the
relative size of budget gaps, legal obstacles to balanced budgets—specifically, a supermajority requirement for some or all tax increases or budget bills, and poor money-management practices.
Where Washington appeared to fare badly was in the size of the budget deficit and the fact that Washington is one of 17 states to require a supermajority to raise taxes.