The 10 Brokest States in AmericaPosted on by Igor Derysh (IgorDerysh)
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If you think your state is in big financial trouble, just be thankful you do not live in one of these states headed straight for the poorhouse. Even if yours is on the list, at least there are states that have it worse off than yours...unless you live in the brokest state, of course.
With deep cuts to schools and higher education as well as across the board state agency cuts, Connecticut is preparing for a deficit of $3.44 billion once the next fiscal year begins. Saddled with the problems of his predecessor (sound familiar?), brand new governor Dan Malloy will have some tough decisions to make as his state could be more than $10 billion in the red over the next three years as more than 20% of the state's budget cannot be paid for.
Oregon uses a two-year budget cycle and the next one could bring a budget deficit of more than $3.5 billion, even if the state's revenues improve. Like Connecticut, it is education that is most on the chopping block as the teachers' union has been given an ultimatum: take pay cuts or find new jobs.
8. ArizonaOne of the most conservative states on the list, Arizona has been reeling from the housing crisis as long as any state on the list and now faces a budget gap of over $1.5 billion. Governor Jan Brewer already has the state's social programs in her sights.
Proposed cuts include taking Medicaid coverage away from 280,000 adults, which could cost Arizona an additional $2 billion in federal aid, as well as selling off the state's parks to private corporations and cutting the university budget by nearly 40%.
As of the new legislative session, Nevada finds itself $3 billion short. All state workers will see their pay cut by 5% and many residents will see increases in various taxes. Since Nevada was one of the first states to really feel the housing crisis and has been in financial turmoil for several years already, the state's analysts claim that if the state continues to hemorrhage money without added revenues, they will have to eliminate every state agency except education.
Photo by The Toad
The former epitome of American production now finds itself a state ravaged by unemployment, the housing crisis, and a budget shortfall close to $2 billion. With unemployment still at 10.6% and the Detroit unemployment rate at nearly 20%, the state will try to cut spending from state worker salaries and education while trying to keep tax increases off the table.
Photo by the Trucking Tourist
Despite all of Texas' talk about fiscal responsibility, the Lone Star State is facing a $27 billion shortfall in their next two-year budget and comes in at number 5 among the brokest states. Unwilling to make any tax increases, the Republican-run government will look to balance the budget by eliminating some agencies entirely while slashing others by 80%. Among the planned cuts is a $5 billion cut to education, which would mean that schools would receive $10 billion less in funding than mandated by law.
4. New York
Photo by Gilles Messian
New York's current deficit is expected to balloon to $13.5 billion by 2012, more than a fifth of the entire state's budget. Education and Medicare cuts that were already in full swing under Governor David Paterson will become greater under new Governor Andrew Cuomo. New York has seen their tax revenues fall by nearly 50% since the financial crisis due to layoffs and pay cuts, but current leadership is unwilling to raise taxes.
3. New Jersey
Suffering massive tax revenue losses like most other states was not enough -- New Jersey also lost billions in revenue from struggling Atlantic City casinos. The state currently faces a $10.5 billion budget shortfall in 2012, more than 37% of the entire state's budget. Governor Chris Christie has already cut pensions and plans cuts to Medicaid, but localities have already begun to make drastic cuts.
Most notably, Camden, one of the country's crime capitals, recently laid off half of its police force and a third of its firefighters. Good thing they have guys in red jackets to sort it all out...
Having become the face of state financial turmoil, California is facing a $25.4 billion budget shortfall, nearly 30% of the state's entire budget. The state has already made significant cuts and plans even more to California's state funded health care system, higher education, welfare, and transportation. California is also planning significant tax hikes and potential layoffs and sell offs in the future as there is no end in sight for their budget problems. There is good news for Californians, however: your state is not the one closest to closing up shop and heading for the border. That honor goes to...
Largely thanks to a pension system run wild, Illinois is looking at a $13 billion budget shortfall by 2012, meaning they will not have a way to cover nearly half of their budget. Though some cuts have already been made to state funded programs and state income taxes raised by 66%, analysts see only financial disaster in Illinois' future as current cuts do not come close to significantly lowering the deficit. And so Illinois, who is currently letting prisoners out early because it can no longer afford to house them and is cutting hundreds of millions of dollars in aid to the elderly and disabled, is simply... The Brokest State.