States Turning to Last Resorts

The NYT has a story today about just how dire the situation is for the U.S. states.  There are many unusual measures being enacted in order to scrape up revenue: releasing prisoners early… closing state parks… Maine is going to tax candy. Kentucky is going to tax cell phone ringtones.

“Legislators have never dealt with a recession as precipitous and rapid as this one,” said Susan K. Urahn, managing director of the Pew Center on the States. “They’re faced with some of the toughest decisions legislators ever have to make, for both political and economic reasons, so it’s not surprising that the environment has become very tense.”

The hardest part is that it’s going to take a while. If you believe the analysts who say we have indeed hit the bottom of the market drop, we’ll still have a long while to wait before unemployment turns around and the housing market picks up.  And both of those things have to happen before consumers are back to work, and will start spending again — in turn creating the boosts to sales, property and income tax that the states will require in order to see revenues return.  So there’s still a very long way to go.