States Begin New Fiscal Year with Jerry-Rigged Budgets or None At All

July 2, 2009 (LPAC) — While California's budget crisis is dominating the news, almost no state is untouched by the Obama Administration's refusal to implement a competent economic recovery program. A number of states passed into their new fiscal year without a budget at all, and many others patched together budget agreements with one-time fixes that probably won't last through the end of the year. Illinois, Pennsylvania, Ohio, Arizona, and North Carolina ended their budget years without a budget.

While Pennsylvania, Ohio, and North Carolina all passed temporary spending bills to prevent government shutdowns, the process broke down completely in Illinois, with lawmakers being sent home without any plans to return. Gov. Pat Quinn has been demanding a 50% increase in the state sales tax, but the Illinois House refuses to go along. On Wednesday, House Speaker Michael Madigan and Senate President John Cullerton finally announced a special session to begin July 14 to deal with the budget crisis. It's not clear how the government will operate in the mean time without a budget. In Arizona, legislators passed a budget agreement in the early hours of Wednesday, but Gov. Jan Brewer has not yet indicated whether or not she'll sign it.

Other states that managed to pass a budget, did so using federal stimulus and other similar types of fixes to close large budget gaps. The budget signed by New Jersey Gov. Jon Corzine cuts spending by $4 billion and relies on many one-shot budget fixes, including federal stimulus money, a tax amnesty program, and state worker givebacks. Wisconsin has a budget that increases spending, but only because of $3 billion in federal stimulus money. The budget plan includes furlough days and wage cuts for state employees. Washington State plans 3,200 layoffs to try to keep its budget in balance over the next two years, and Florida's $66.5 billion budget is propped up by Federal stimulus money, a $1 cigarette tax increase, and increases in drivers' license and other fees.