CBPP takes a look at the state funding in the now-enacted economic stimulus legislation and notices something of a problem: it only covers 40 percent of all the state budget deficits. Obviously, the federal government was never going to be able to ensure that every state has a balanced budget, but state aid was reduced in the final bill and we should look clearly at the consequences: The state-level cuts that will come as a result of the remaining deficits will certainly prolong the recession; jobs will be lost, the social safety net will be weakened, and investments in health care, schools, roads and law enforcement will all fall by the wayside -- Phoebe documents some of those losses. California's budget crisis, for instance, will result in tax hikes, program cuts and thousands of lay-offs around the state; it could be a harbinger of the coming months as other states assess their fiscal situations. California will be able to rescind some of their cuts thanks to the stimulus, but their overall fiscal strategy still flies in the face of what should be done to alleviate the recession. While not all states have budgeting processes as insane as California's, hard decisions are going to have to be made nationwide. Oh, and speaking of hard decisions, only one Republican voted for the plan-- supported by Governor Arnold Schwarzenegger -- in California's state senate. Ideological purity above all else, I suppose.
-- Tim Fernholz
