States Face Severe Fiscal Crunch

Many states face constitutionally mandated deadlines to balance their budgets this week, marking the end of the second quarter. For the 38 states facing fiscal deficits, achieving balanced budgets in the current economic climate is exceptionally difficult, due to steep revenue shortfalls. Increases in general taxation are often politically untenable, and since many states have strict borrowing limits, they face deep spending cuts. Many public employees will lose their jobs, creating a renewed surge in unemployment and economic distress.