The LookoutState budget picture could get bleaker
As we all know, states from California to New York are facing huge budget shortfalls. That's because, thanks to the stalled economy, state government revenue fell by almost 31 percent in 2009.
But new census data show that the worst may be to come. That's because there was also an enormous drop in "insurance trust revenue" -- that is, pension, unemployment insurance and workers' compensation funds -- reports the New York Times.
These losses totaled $477 billion -- around seven times the amount by which tax revenue declined. And they're not showing up in state budgets yet. Rather, they'll have the effect of driving states' pension contributions way up in future years, to make up the shortfall.
In other words, those pushing to cut benefits for state workers just got a boost.
(Photo: AP/Seth Perlman)
