The Center on Budget and Policy Priorities reports that at least 29 states and the District of Columbia are facing budget deficits in fiscal year 2009, with a total estimated shortfall of about $48 billion.
The continuing crisis in the housing market has led to sharp reductions in sales tax and property tax revenues. Increased unemployment will also reduce income tax money for state coffers. California alone is anticipating a $22.2 billion shortfall, and New York is looking at a projected deficit of $4.9 billion.
Governments have many options to make up for lost revenue—taxing corporate profits to name one. Instead, they are predictably starting to slash services to poor and working class communities. Measures include cuts in health care, grade school and pre-school programs, and reduced support for public colleges and universities.
