JENNIFER STEINHAUER
Facing Deficits, States Get Out Sharper Knives
Some governors, including Arnold Schwarzenegger in California and David A. Paterson in New York, have called special legislative sessions to deal with the crisis. Others are demanding hiring freezes and across-the-board cuts. A few states are finding their unemployment insurance funds running dry, just as the ranks of out-of-work residents spike. In Michigan, to reduce overtime costs, fewer streets will be salted this winter. In Ohio, where the unemployment rate is above 7 percent, the state may need a federal loan for the first time in 26 years to cover unemployment costs. In Nevada, which is almost totally dependent on sales taxes and gambling revenues, a health administrator said the state may be unable to pay claims in a few months. In Oregon, moreover, Gov. Ted Kulongoski, a Democrat, has proposed a $1 billion economic stimulus plan centered on infrastructure improvements, which he envisions would be paid for by raising the state’s gas tax by 2 cents per gallon and increasing a host of vehicle fees. More
This from Bloomberg:
Sphere: Related Content“As many as 27 states face deficits totaling $26 billion, according to a letter distributed to Congress last month by the National Governors Association. ‘The numbers are astounding in terms of lost revenue,’ says Leonard Santow, a former Federal Reserve economist who is now a managing director at Griggs & Santow in New York.”
Tags: Arnold Schwarzenegger, california, David A. Paterson, Michigan, Nevada, new york, Ohio, oregon
