State & Local Government

Twenty-nine states and the District of Columbia face a combined budget shortfall of about $48 billion in their 2009 budgets, which in most states take effect in July. Already, state and local governments modestly trimmed jobs in the past year, but to close the looming shortfalls states will have to make more dramatic job cuts, and program and project cuts will have ripple effects in the private sector as well. This will worsen economic conditions in states that are already struggling economically, including Arizona, California, Illinois, New Jersey, New York and Rhode Island. Congress should pass an aid package to states that will help them balance their budgets without deepening the recession.