USA Today reports that many state governments are facing severe budget shortfalls due to the collapse of the housing market and the weakening recession. This is a very important issue, both because states (in the absence of federal help) are likely to be forced to cut many important services at a time when their populations most need them, and cutbacks in spending and tax increases necessitated by the shortfall will contribute to the downturn. This article would have been far more informative if it expressed the shortfalls as a share of the total budget. For example, the piece tells us that California faces a shortfall of $1 billion a month, but it doesn't let us know how large a share of its total budget this is (approximately 12 percent). Similarly, the article tells us that Rhode Island faces a shortfall of $400 million. It would have been helpful to tell readers that this is also approximately 12 percent of the projected budget for 2009.
--Dean Baker
