US State Governments Choking on Budget Dust

As we move into the current economic "recovery," states across the U.S. try to figure out what to do with empty tax coffers. The dilemma remains that most states need to raise taxes in order to service leftover debt from the "aught" decade and pay for current services to their citizens. Problem is, with tax revenues in the negative and tax-paying businesses still trying to crawl out from under a fiscally devastating 18 months, it's ugly, ugly, ugly.

The latest e-mail update from Stateline.org (see photo) is soaked in red ink, as states try to scrape more shards out of empty revenue buckets. Meanwhile, where's the Stimulus dough that was supposed to right this fiscal ship? State officials complain that its taking way too long to get needed cash into the right hands.

The irony of all this? Indiana, traditionally a state that lives hand-to-mouth, entered the Great Recession with more than $1 billion in reserves and a balanced budget. The Hoosier state has subsequently taken its own share of blows to the head, but is still standing on its own while its neighbors are wielding panic-guided axes. No wonder Republicans are talking about Mitch Daniels, the fiscal architect of this current Hoosier stability, as a possible candidate for Prez.

It will all work out, but golly is it painful at the moment...