In case you missed it the New York Times published a highly entertaining (and somewhat disturbing) guest op-ed on Saturday entitled "Stupid Budget Tricks" that details some of more creative and drastic tactics that states have used when times were tight (such as selling a prison to yourself, securitizing lottery proceeds, and surrendering 75 years of toll road revenues). And times are increasingly tight for state budgets around the country as the economy forces a slowdown in revenues and the full impacts of all of those ill-advised and unfaffordable tax cuts are realized. For more on how much state budgets are hurting check out the latest report on this topic from the reliable Center on Budget and Policy Priorities.
Here in NC, the Stupid Budget Tricks syndrome has not infected our lawmakers for the most part, although the actions taken this year to pay for new investments (e.g. borrowing, using one-time revenues, etc.) are going to make life difficult for the next governor and the General Assembly. Revenues will need to grow at least $1 billion in FY 2009-10 (or an unrealistic 5%) in order to pay to continue the investments that were made this year and that does not include money for pay raises for state employees or teachers. For more on the long-term consequences of the recently adopted state budget, check out the latest report from my organization, the NC Budget & Tax Center. In this report we detail the impacts of the new budget on state services and lay out the factors that will make budgeting very unpleasant for state leaders in 2009.