Out of Control

After the news yesterday regarding California's request for a $7 billion federal bailout, I ran across yet another indicator of declining state fiscal conditions. Nearly a QUARTER of states are now staring down budget shortfalls in excess of $1 billion, according to the Center for Budget & Policy Priorities.

FY2009 State Budget Deficits over $1.0 billion, ranked by magnitude

1. California: $22.2 billion (22.0% of FY09 general fund)
2. New York: $5.5 billion (9.8% of FY09 general fund)
3. Florida: $5.1 billion (19.9% of FY08 general fund)
4. New Jersey: $2.5 billion (7.7% of FY09 general fund)
5. Arizona: $2.0 billion (19.9% of FY09 general fund)
6. Illinois: $1.8 billion (6.3% of FY09 general fund)
7. Georgia: $1.8 billion (8.7% of FY09 general fund)
8. Ohio: $1.3 billion (4.5% of FY09 general fund)
9. Massachusetts: $1.2 billion (4.3% of FY09 general fund)
10. Virginia: $1.2 billion (7.1% of FY09 general fund)
11. Nevada: $1.2 billion (16.0% of FY09 general fund)
12. Maryland: $1.1 billion (7.2% of FY09 general fund)

And if you think that's bad, just check out a sampling of some major city budget shortfalls:

• NYC: $2.3 billion
• Chicago: $420 million
• L.A.: $400 million
• Atlanta: $140 million

Combine this with the tighter access to the muni bond market that I wrote on Thursday, and it becomes very clear that the government binge in recent years is coming to a grinding halt and that there is no way to avoid belt-tightening, streamlining, and innovative procurement strategies.