States Set to Ring in Independence Day Sans Budget

Illinois Gov. Pat Quinn vetoes the Illinois budget in his office at the Illinois State Capitol in Springfield, Ill., Wednesday, July 1, 2009. (AP Photo/Seth Perlman)

(AP)

Several states are facing the prospect of government shutdowns and program cuts as they enter the first weekend of the fiscal year and July Fourth holiday without a budget in place.

"This downturn, even more so than previous downturns, really is affecting every state right now," said Brian Sigritz, a staff associate with the National Association of State Budget Officers.

The Washington-based organization says 42 states wrestled with budget deficits this spring, the most since it began tracking budgets 30 years ago.

States weathered similar problems in the recessions of the early 1980s, 1990s and earlier this decade. The confluence of so many problems hammering the economy at once make the present situation seem dire.

"Numerous things look worse than some past recessions," said Bert Waisanen, a fiscal analyst with the Denver-based National Conference of State Legislatures. "The housing market is worse. Industrial production is worse. Wages are nearly worse."

Related

As Deficit Grows, Calif. Prepares to Issue IOUs

The sputtering economy has created an across-the-board drop in tax collections. Taxes ranging from sales to personal income to property are all down, Sigritz said.

California Gov. Arnold Schwarzenegger declared a fiscal emergency and ordered state offices closed three days a month to save money as state officials began paying bills with IOUS on Thursday.

Deep budget cuts have already forced California school districts to cancel summer school programs, moves that have affected — among others — elementary and middle school students in Los Angeles, which has the country's second largest district.

School officials in North Carolina, Oregon, Florida and other states have also cut or limited summer classes.

North Carolina's budget crunch apparently wasn't bad enough to persuade lawmakers to work through the holiday weekend.

House and Senate negotiators said Thursday they will go home rather than iron out differences in taxes and spending, despite Gov. Beverly Perdue's stern advice to finish the budget.