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.

The Blacksmith: A Short Film About Art Forged From Metal

"I'm exploiting the maximum of what you can ask a piece of metal to do."

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

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

An Ingenious 360-Degree Time-Lapse

Watch the world become a cartoonishly small playground

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

Video

The Rise of the Cat Tattoo

How a Brooklyn tattoo artist popularized the "cattoo"

More in Business

Just In