State governments have severe budget problems of their own making. Unlike the federal government, states cannot print money, so they cannot kick their financial problem cans down the road too far.
Yet, their political overseers have the same bad habits; continuing to spend too much and not correcting the addiction.
One major example: Expensive public employee pensions, especially when not properly funded, if funded at all.
These recession days, states’ tax revenues are lower which make financial burdens even more onerous. As taxes cannot be easily raised. It is becoming more difficult to keep looking for this source of easy state revenue.
States will simply have to cut back on much of what they are now offering, and begin tightening their belts. They will simply have to restructure public union salary, fringe and retirement contracts.
This includes resisting federal mandates that force state spending by edict from Washington.
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