To make a slight adjustment to an oft-used phrase – “when Washington sneezes, the states get a cold.” First it was Wall Street melting down, then it was Main Street following suit and now it is state governments that are strapped for cash. Nearly half of the states are in serious financial difficulties, with many more on track to join them in cutting substantial portions of their budgets. While the Feds just borrow and print money, states are required to balance their budgets and thus do not have the luxury of taking bold steps to right the economic ship of state.
In many respects the state budget meltdown is just as serious as the national financial meltdown because the states are the primary provider of assistance to the disabled, the poor, the homeless, and those who depend on subsidies for education, housing, job training and a host of other essential human services. When Lehman Brothers went down in flames Americans got angry, but when California or Florida or Georgia or Massachusetts are forced to cuts billions from their budgets, there is a human cost, not just a temporary dip in 401K retirement accounts. Real people lose their jobs, their housing, their training and their safety net. What’s even worse is that as the economy slides further down, the demand for state services will only increase and more real people will be looking to their state governments for assistance.
The disturbing part of these budget cuts is that for most citizens, the money that is spent by state government is rarely on the media’s radar and therefore the public often does not understand how their tax dollars translate into funding a critical social need. Those who complain about government spending don’t realize that a sizeable portion of their tax dollars go for available beds in mental institutions, menial jobs for the blind and the the disabled, caretakers for the aged, educational assistance to promising young minds, and special health programs for poor pregnant women. Sure there is waste to cut, but this state budget meltdown is cutting away valuable services to those who’s only lifeline is the state. It would be nice if the private sector and an army of volunteers picked up the slack, but the financial meltdown has closed their wallets and dampened their generous spirits.
Of course there is a way out of this state meltdown, but seeking new tax revenue to make up for the shortfalls is still off the table. Americans are desperately holding on to the Reagan doctrine that government is the problem, and if we don’t feed the ” beast” we will all be better off. Tell that to those people in the states whose lives are enhanced and protected because of state programs; to them government is not the problem, it it their last best hope for some measure of quality and opportunity in their lives.