Study: California Not Only State Facing Fiscal Crisis

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(Sacramento, CA)
Wednesday, November 11, 2009
The report out Wednesday is from the Pew Center on the States.  Kil Huh helped work on the study.  He says it looked for states that had many of California’s problems –like revenue declines, high unemployment and high foreclosure rates.
Huh: “What we did was construct a California scorecard to really see what states were very similar. What we found is states as diverse as Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin all had very similar characteristics.” (0:18)
The study concludes those states risk higher taxes, more layoffs of government employees, increasingly crowded classrooms and fewer services.
Why Nevada?  Huh says it has the highest foreclosure rate in the nation – and has seen its revenues shrink.
Huh: It’s a state that relies heavily on gambling and tourism – and tourism and gambling have been down this year. It’s a state that doesn’t have a personal income tax or a corporate income tax, so it relies heavily on sales, which really depend on the gamblers and tourists coming into town to spend money.”
The study also noted that voters have approved ballot initiatives that restrict or block tax increases. It suggests that ties legislators' hands in dealing quickly with fiscal problems.