The State Budget Crisis in a Nutshell

It's bigger than the pension crisis, where an aging public workforce is coming online for pension payments that were decimated in recession. It's also a straight-up revenue crisis. After four decades when revenue grew consistently at 6 percent every year, states are in the middle of a five year drought, Dan Balz writes.

clear pixel

States would probably not return to revenue levels they enjoyed in 2008 until 2013 or 2014....

Once revenues return to prior levels, states will have unmet needs to deal with, plus the arrival of the new health-care law and the financial costs it will entail.

"When you put that all together and add health-care reform in the middle of that in 2014, we're in a lot of trouble," he said.

Scheppach sees no alternative to major cuts in education funding by the states. Higher education has already felt the pinch, but that is likely to extend to elementary and secondary funding, as well. "Basically, health care is eating our seed corn," he said.

Read the full story in the Washington Post.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In