The deputy director of the State Fiscal Project at the Center on Budget and Policy Priorities discusses state fiscal strategies
Some folks think the states' fiscal situation is not as dire as many think because tax receipts are coming back. Do you agree?
Revenues have just started to pick up a little. But the big problem is that in the last two years the states were helped a lot by money from the Federal Recovery Act, and that money is just about gone now. So even with a tiny uptick in revenue, the hole is getting bigger.
There's story after story about states cracking down on unions and cutting salaries. Is this the right strategy?
States are in a huge hole because they have never seen a drop in revenues like they saw during this recession. If the states' finances were in perfect shape, they would still be in a huge hole because of this drop in revenues. We always need to spend efficiently, but there are some folks who don't like the fact that public workers get decent benefits when people in the private sector no longer do. And instead of making people in the private sector more economically secure, they want to take it away from somebody else.
When you say that there needs to be spending responsibility, how do you envision that?
One area where spending has grown tremendously is the tax breaks given to businesses in the hopes they will create jobs. Yet the states never go back to evaluate the tax breaks to find out if we got what we paid for. Is this a better use of money than investing in education and transportation?