Are you listening, Ed Rendell?
Pennsylvania has run up a budget deficit of $565 million just four months into the current fiscal year. State lawmakers predict a deficit of $2.5 billion by the end of the fiscal year.
How did we get into this mess? When times were good, Gov. Rendell proposed budgets that increased spending at twice the rate of inflation. Since Rendell took office in 2003, state spending has risen by more than $7 billion. Rendell also borrowed another $3 billion.
Now that times are tough, tax revenues are shrinking dramatically. Rendell has proposed $300 million in cuts from administrative spending, but that won't put much of a dent in a $2.5 billion deficit.
Rendell isn't alone in screwing up his state's bottom line.
From Malanga's column:
From the end of the last recession in 2003 until this year, states collectively boosted general-fund budgets by an annual average of some 6.4%. In just 2006 and 2007 alone they added about $100 billion. During the period from 2003-2008, states also took on 38% more debt, increasing their collective indebtedness to $2.19 trillion.To read the full article, visit the newspaper's Web site.
Now it's cold-shower time. Earlier this year, in the spring, more than half of the states grappled with budget deficits amounting collectively to nearly $50 billion. Since then tax collections have fallen short of projections, producing further midyear budget holes in nearly two dozen states.