Whoops. What if it’s not just freespending “Blue” states like California, Illinois, and New York that run into budget trouble.
When California faced a $60 billion deficit last year—a shortfall that was bigger than the entire budget of most states—you could almost hear the chortling from the Texas governor’s office. It seemed a handy example of what happens when you put big-spending liberals in charge.
It wasn’t that simple, though. The causes of California’s problems—and Texas’ lack thereof—were varied and complex. And now the states’ budget deficits are looking very similar.
Texas: $18 billion shortfall (estimated) or about 20 per cent of state spending.
California: $19.1 billion shortfall (official estimate) or about 20 per cent of state spending.
The report goes on to note a few differences. Texas has a better credit rating, and it has $9 billion in the bank in a rainy day fund. Also it hasn’t had wrenching budget cuts yet, so presumably it has plenty of fat to flense.
But it will certainly have to cut. Having a small, lean government is no protection.
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