This is not going to end well.
(AP) — At statehouses around the country, the Great Recession is far from over: It could take years for many states to climb out of the hole and return to pre-downturn spending levels.
An Associated Press examination of 50 balance sheets shows state budgets and bank accounts still ravaged by a drop in tax revenue. Many states are also facing enormous long-term pension and health care obligations. At the same time, the payout of stimulus money from Washington that helped many states in their darkest hours has come to an end.
While some states saw a modest jump in tax collections this spring, the combined revenue projected by the 50 states in the coming fiscal year — $734 billion — is still down by about $34 billion, or 5 percent, from the 2007-08 fiscal year, when the recession began.
Some states are in far worse shape. New Jersey, Nevada, Oregon, Illinois and Louisiana reported deficits that are more than 20 percent of the state general fund.
- 12 states started the year with deficits that were equal to 15 percent or more of their general fund, a state’s main checkbook for paying day-to-day operations.
- States with the highest per capita number of Medicaid recipients were among those with the largest budget deficits, as a percentage of general fund revenue.
- Seven states are spending 10 percent or more of their general funds to pay for their prison systems.
- The average general fund amount dedicated to colleges and universities was 11.6 percent but varied greatly among states.
- All 50 states have a combined $689.5 billion in unfunded pension liabilities and $418 billion in retiree health care obligations. Five states have unfunded public employee pension liabilities of $50 billion or more.