On Tuesday, the State Budget Crisis Task Force issued its report. The task force was chaired by by Paul Volker, and Richard Ravitch. Those of you who live in New York will remember Mr. Ravitch, a Democrat, as the person who helped New York City avert bankruptcy in the mid 70’s. The task force was funded by the Blackstone Group and George Soros’s Open Society Foundation.
Much to no one’s surprise, their report isn’t pretty.
…growing gaps between entitlement spending and available revenue are becoming unsustainable. Such challenges are squeezing spending on education, infrastructure and other services.
Just what are those entitlements identified in the report? No surprise here…Medicaid and underfunded government pensions.
The report, released Tuesday, identified six major threats to states’ fiscal health, including Medicaid spending, underfunded retirement promises, budgetary ‘gimmicks’ designed to solve short-term cash needs and increasingly volatile tax revenue. It urges state officials to regularly replenish their rainy-day funds and criticizes states for using one-time revenue sources, such as asset sales to balance budgets.
Does any of this sound like your state?
How will your state cope with this?
There really are only two choices…pull harder taxpayers, or reduce state spending on entitlements.
But, more to the point, why do we need a task force to tell us this? Doesn’t anyone that we elect to public office anywhere understand this?
If they don’t they should be thrown out, and if they do, but are doing nothing, they should be thrown out as well.