States facing "the worst deficits"

The AP (3/18) reports that states are confronting "the worst deficits they've faced in a decade or more" as the economy worsens. In response, states may "take away government health insurance and benefits from millions of Americans,"including children, the disabled, and the elderly. Also facing cuts are "aid to schools and universities," as well as state workforces. The AP notes that states are even considering "releasing prisoners before their sentences are completed."

Nevertheless, few states are considering [general] tax increases to close budget gaps. Instead, they may increase lottery ticket sales, promote Indian gambling, or further raise taxes on cigarettes and alcohol. As AP points out, those types of revenue-generating mechanisms tend to be regressive, "disproportionately hit the pocketbooks of the same poor and working-class that would be hurt by the spending cuts."

(Courtesy to ICMA Newsletter.)