It was throbbing enough this year for states, hit hard by the effects of the economic downturn, to balance their budgets. And 2010 will only be worse.
Most of the states approved a balanced budget for the 2009 fiscal year. But many states were in the red within two months of the fiscal year’s start on July 1, by a total of about $24 billion. States face a combined budget shortfall of $350 billion in the next two fiscal years, according to the center and the Council of State Governments, which uses similar projections.
Many legislatures made cuts to programs such as healthcare and social services, and reduced support for public colleges and universities. Most of those funds will be gone next year. At the same time, the economy isn’t expected to perform the type of rapid turnaround that would, for example, drive real estate values back up. In addition, continued high unemployment rates will mean reduced income-tax receipts, more outlays for unemployment claims and additional demand for safety-net services.
"Businesses are frequently the easiest bogeyman when it comes time for legislators to look at.”Small business owners will need to be even more vigilant and organized to protect themselves when the tax man looks their way in 2010. It’s hard to believe that they would continue to come after America’s job creators during a continuing recession, but that’s what we have to expect."
Most of the states approved a balanced budget for the 2009 fiscal year. But many states were in the red within two months of the fiscal year’s start on July 1, by a total of about $24 billion. States face a combined budget shortfall of $350 billion in the next two fiscal years, according to the center and the Council of State Governments, which uses similar projections.
Many legislatures made cuts to programs such as healthcare and social services, and reduced support for public colleges and universities. Most of those funds will be gone next year. At the same time, the economy isn’t expected to perform the type of rapid turnaround that would, for example, drive real estate values back up. In addition, continued high unemployment rates will mean reduced income-tax receipts, more outlays for unemployment claims and additional demand for safety-net services.
"Businesses are frequently the easiest bogeyman when it comes time for legislators to look at.”Small business owners will need to be even more vigilant and organized to protect themselves when the tax man looks their way in 2010. It’s hard to believe that they would continue to come after America’s job creators during a continuing recession, but that’s what we have to expect."
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