States Feeling Budget Squeeze
Oct. 11 -- One month after the terrorist attacks on New York and Washington, D.C, the shock is being felt in state capitols around the country.
Governors of more than a dozen states are calling for budget cuts, hiring and wage freezes, and maybe even higher taxes to offset growing budget shortfalls.
And in most cases, the attacks are being blamed.
California May Lose Billions
Today in California, Gov. Gray Davis warned all state agency and department to prepare to cut their budgets by 15 percent.
"The terrible tragedy of Sept. 11 has injected even more uncertainty into our economy," said Davis. "And we must prepare for greater revenue reductions as a result."
State revenues already are running $1.1 billion below projections for the first three months of the fiscal year, which began July 1.
State Budget Director Ted Gibson said, "we could see losing billions of dollars." Some lawmakers put that shortfall at $4 billion.
Shortfalls Around the Nation
It?s a scenario being played out all across the country.
Florida: In Florida, tourism has dropped dramatically because of the attacks and that is hurting the state?s revenues. It's estimated than more than $1.5 billion will be lost by the end of the fiscal year.
Gov. Jeb Bush doesn't want to raise taxes and he's already talking about eliminating new programs just added to the budget three months ago but not yet implemented.
Bush has called a special session of the state legislature to deal with the crisis.
Kentucky. The state is looking at another $200 million in budget cuts. State forecasters yesterday lowered state revenue projections, saying the impact of Sept. 11 will cost the state $171 in lost revenue and wipe out any reserve.
North Carolina. Gov. Mike Easley said that the state's "economic slowdown has worsened significantly since Sept. 11." The state brought in about $155 million less in taxes and revenues than expected over the past three months, most of the decline occurring after the terrorist attacks.
