Other states moving to plug big budget gaps

At least 27 other states facing shortfalls

So far, at least 27 states, including Connecticut, are facing state budget shortfalls this year — ranging from tens of millions of dollars to several billion.

The fiscal problem is a "moving target," too, with each month bringing fresh projections of budget deficits larger than the month before.

Current deficit projections in Connecticut range from about $100 million to $300 million, but the budget gap will likely grow when the full impact of the current economic downturn is realized.

New York Gov. David Paterson plans to bring state legislators back later this month to plug a state budget gap that could hit $14 billion next year and $47 billion over the next three and a half years.

Before New York lawmakers meet, Gov. Paterson has set a critical ground rule: “We have agreed that any taxation right now would only exacerbate the problem. If anything, we need to lower taxes,” he recently told Congress.

Understanding that businesses drive the economy, Paterson added that he believes "We need to lower taxes for some of our businesses [in order to] create jobs."

The budget stories are similar in other states:
• Rhode Island — The largest state-employee union has offered to forgo a pay raise and pay more for health insurance to avoid layoffs. The state budget deficit is projected to grow to over $100 million.

• Massachusetts — Gov. Deval Patrick said he plans to cut 1,000 state government jobs and reduce the state budget by more than $1 billion.

• Virginia — Gov. Tim Kaine revealed a $900 million budget gap and announced 500 state employee layoffs.

• Kansas — Gov. Sebelius said she sees "little support for increasing taxes" to fill a budget gap that could hit $1 billion.

• California —With the state facing an $11.2 billion deficit this fiscal year, Gov. Arnold Schwarzenegger is proposing a mix of cuts and temporary revenue increases, such as a higher sales tax. The state is caught in a revenue bind in part because it has leaned too much on the fortunes of wealthy residents. As their stock portfolios and capital gains earnings dropped, so have state tax revenues.

In Connecticut, Gov. Rell has used her authority to cut state spending and is looking at other ways to deal with a budget deficit that continues to grow. She has called state lawmakers back to the Capitol on November 24 to deal with the crisis. The newly elected legislature will begin working on a new two-year state budget in January.

CBIA urges them to exhaust every possible means of reducing the cost of state government before even discussing tax increases that would further slow our recovery.