Sunday, January 10, 2010

invitation to disaster

NYTimes | Without substantial new federal help, state cuts that are now merely drastic will become draconian, and hundreds of thousands of additional jobs will be lost. The suffering is already widespread. Some states have laid off or furloughed employees. Tens of thousands of teachers have been let go as cuts have been made to public schools and critically important preschool programs. California has bludgeoned its public higher education system, one of the finest in the world.

Michigan has cut some of the benefits it provided to middle-class families struggling with the costs of health care for severely disabled children — benefits that helped pay for such things as incontinence supplies and transportation to special care centers. The Grand Rapids Press quoted a state official who acknowledged that the cuts were “tough” and were hurting families. But he added, “The state simply doesn’t have the money.”

The collapse of state tax revenues caused by the recession is the sharpest on record. Steep budget cuts have not been enough to offset the unprecedented plunge in tax collections that resulted from unemployment and other aspects of the downturn. The shortfalls swept the nation. As the Rockefeller Institute of Government reported, “Total tax revenue declined in all 44 states for which comparable early data are available.”

State governments are not without fault. Very few have been paragons of fiscal responsibility over the years. California is a well-known basket case. New York has a Legislature that is a laughingstock. But for the federal government to resist offering substantial additional help in the face of this growing crisis would be foolhardy. You can’t have a healthy national economy while dozens of states are hooked up to life support.