Red Ink In The Bluegrass State

It's not just California facing a 2010 budget disaster.  As Yellow Dog reminds us, Kentucky's budget is shaping up to be nearly as bad from a percentage standpoint:  A $1.5 billion dollar hole over the next two years when the state's annual budget is just $9 billion.  For just FY 2010, it's an $890 million shortfall...ten percent of the state's budget.  The Dog's advice:

But so far no one is facing the stark truth: spending cuts won't close this giant pit of no revenue. Not unless you want to shut down prisons, hospitals and schools.

Raising taxes on things most voters won't mind, like cigarettes and liquor, won't avoid this crisis, unless you want to tax both of those manufacturers right out of business.

Nothing less than radical, burn-it-to-the-ground-and-start-from-scratch reform of the tax system is going to fix this.

Agreed.  Any system that allowed a shortfall this bad is broken fundamentally.  And keep in mind there are plenty of other states out there facing situations as bad or worse in 2010:

A new report from the Pew Center on the States warns of “fiscal peril” in 10 states which, if unaddressed, will hamper the nation’s economic recovery:

These states’ budget troubles can have dramatic consequences for their residents: higher taxes, layoffs or furloughs of state workers, longer waits for public services, more crowded classrooms, higher college tuition and less support for the poor or unemployed. But they also pose challenges for the country as a whole. The 10 states account for more than a third of America’s population and economic output. And actions taken by state governments to balance their budgets — such as tax increases and drastic spending cuts — can slow down the nation’s economic recovery.

Those states, if you're wondering, are California, Arizona, Rhode Island, Michigan, Wisconsin, Nevada, Oregon, Florida, New Jersey, and Illinois.

Might as well add Kentucky to that list, too.  2010 is shaping up to be the second half of this economic disaster double feature.