States aren't very successful at this
Tuesday the House of Representatives passed a bill that will funnel another $26 billion in stimulus to state governments. The goal is to boost Medicaid funds and help prevent layoffs of teachers.
A Financial Times graphic illustrates why so many states are clamoring for the funds. For the fiscal year that typically started July 1, state governments face a combined budget shortfall of $83.9 billion this fiscal year. Seven states have projected budget shortfalls over 20%: Alabama, Arizona, Illinois, New Jersey, North Carolina, Maine, and Nevada.
States with the lowest credit ratings include Arizona, Kentucky, Louisiana and Michigan. The FT allows readers to click on an interactive map with details about each state, such as the size of the total budget and projected shortfall.
Critics say the bill— which already passed the Senate last week— will just create a larger federal deficit and stop states from administering even further tough budget cuts that would get them through the down economy faster and set them on the path to fiscal health.
But advocates say states didn't create the Wall Street meltdown that led to their current problems, and shouldn't have to pay the price. They are reeling from steep declines in tax revenue, have cut budgets to the bone, and desperately need the help.
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