Scary State Budget Deficits:

Due to this economy and because the States did not see what was coming to them just like normal people, the budget deficits of states have become an ever expanding hole.

Look at what is happening in California. There the budget deficit is ever expanding and recently the California University System had to increase tuition fee by 32 percent which is a very steep increase.

I believe that this is because most of California’s revenue comes in the shape of Personal Income. The famous proposition that the voters in California passed three decades ago regarding capping the property taxes to a certain percentage has started to come to haunt the California Citizenry. Due to this they are unable to collect more taxes during these times. It was fine when the economy was growing and more money was coming in than going out. But the equation has now changed and California is facing a money nightmare.

You know that people want all the facilities but they don’t want to pay for it too much. This is what is happening across the country as state after state is in dire need of funds and have to cut right and left.

Even the states that had saved for the rainy day and started to deplete it faster than they can replenish it. They don’t know where to cut and where to preserve as the Politicians are reluctant to cut the popular programs but they don’t know how to bring in the much need revenues. California maybe an extreme case but other states are not far behind including New York, New Jersey, Connecticut and several others.

Now where does all this lead to in terms of facilities provided to the needy and poor and the weak and the running expenses of the states. This I will discuss in the next article