Jumping The State Budget Grand Canyon

Even with the stimulus, states still face an $89 billion budget gap for FY 2011.

California faces the largest budget gap at $13.8 billion, the report said, with Illinois at $12.5 billion and New Jersey at $11.0 billion following close behind. The remaining states have balanced budgets for the year, and Alaska reported a $355 million surplus.

States are especially agonizing the wind down of federal stimulus funds, which will disappear by fiscal year 2012. State officials from 31 states and Puerto Rico forecast a $73.5 billion budget gap for that year, and 21 states project a $64.7 billion deficit for fiscal year 2013.

By the end of fiscal year 2013, the conference estimates states will have closed a combined $531 billion budget hole since the start of the recession.

Half a trillion dollars taken out of state budgets over five years.  Yeah, that's going to affect state services, programs for the poor, education, state and local employees, infrastructure, public safety, you name it.  The easy cuts have been made, folks.  The rest of these budget cuts over the next 3 years?  They are going to be the hard ones that are going to greatly affect where you live.

Now, think how large this budget gap would be without the stimulus.  Yes, it should have been larger, but it has so far staved off the worst of the cuts.  That ends in July of next year when the stimulus money runs out.

Then the real pain begins.