Thursday
Dec112008
States face $100 billion budget gap as result of recession
Thursday, December 11, 2008 at 2:40PM
The House Appropriations Committee held a hearing today on "The Need for an Economic Recovery Bill."
“These are very difficult times for the American people. The U.S. lost almost 2 million jobs in the last year. Growth in population force mean unemployment has expanded even more - 3.1 million. One in eight persons in the labor force is either unemployed or underemployed,” said Chairman Dave Obey (D-Wisc). Obey discussed the need to increase federal spending in order curtail the effects of the recession.
“States will face a budget gap of $100 billion in each of the next two years; the gap is roughly 15 percent of state operating budgets,” said Obey. “If states raise taxes and cut important investments it would add substantially to the downward momentum of the U.S. economy.” Most state are required to balance their budgets, and may have to call on the federal government to fill their budget gaps.
Three governors testified to the budget cuts that their states are being forced to make and how they will continue to have to make tough decisions concerning which programs and funding that they will have to reduce or eliminate.
“This economic crisis is unprecedented in recent decades..the projected drop in revenue...leaves us facing our largest budget gap ever -- $5.4 billion over the next two years, or 17 percent of our biennial budget,” said Wisconsin Gov. Jim Doyle. “I could cut the [government] workforce for the state of Wisconsin..in half and we still wouldn’t be dealing with the full scope of the deficit we now face,” said Doyle to illustrate how drastic his budget gap was.
States all throughout the U.S. are experiencing drastic problems related to the recession. “The use of our food banks are up over 30 percent in client usage,” said Vermont Gov. James Douglas. “Applications for unemployment is so large that we had to shift 150 people out of other departments to actually deal with the ongoing crisis of servicing those that are applying to unemployment,” said Douglas. “It is time for us all to pull together, join hands together, be partners, address this, not only to stimulate the economy but to service the basic core needs of our communities.”
“These are very difficult times for the American people. The U.S. lost almost 2 million jobs in the last year. Growth in population force mean unemployment has expanded even more - 3.1 million. One in eight persons in the labor force is either unemployed or underemployed,” said Chairman Dave Obey (D-Wisc). Obey discussed the need to increase federal spending in order curtail the effects of the recession.
“States will face a budget gap of $100 billion in each of the next two years; the gap is roughly 15 percent of state operating budgets,” said Obey. “If states raise taxes and cut important investments it would add substantially to the downward momentum of the U.S. economy.” Most state are required to balance their budgets, and may have to call on the federal government to fill their budget gaps.
Three governors testified to the budget cuts that their states are being forced to make and how they will continue to have to make tough decisions concerning which programs and funding that they will have to reduce or eliminate.
“This economic crisis is unprecedented in recent decades..the projected drop in revenue...leaves us facing our largest budget gap ever -- $5.4 billion over the next two years, or 17 percent of our biennial budget,” said Wisconsin Gov. Jim Doyle. “I could cut the [government] workforce for the state of Wisconsin..in half and we still wouldn’t be dealing with the full scope of the deficit we now face,” said Doyle to illustrate how drastic his budget gap was.
States all throughout the U.S. are experiencing drastic problems related to the recession. “The use of our food banks are up over 30 percent in client usage,” said Vermont Gov. James Douglas. “Applications for unemployment is so large that we had to shift 150 people out of other departments to actually deal with the ongoing crisis of servicing those that are applying to unemployment,” said Douglas. “It is time for us all to pull together, join hands together, be partners, address this, not only to stimulate the economy but to service the basic core needs of our communities.”
Reader Comments