CBPP: Many States Couldn’t Accept Loans Anyways

The Center on Budget and Policy Priorities, a liberal policy analysis group, just issued its take on the recent GOP suggestion that states should be given loans, not grants, as part of the Democrats’ soon-to-be-unveiled stimulus package. A point we missed earlier: Because 49 states have some form of legal balanced budget requirement, many wouldn’t be able to accept the loans to begin with. From the CBPP statement:

Many states face fundamental legal barriers to accepting such loans. The constitutions of a number of states explicitly bar the state from borrowing funds to cover operating expenses. Other state constitutions or statutes strictly limit the amount of debt that the state may incur, and in some states, such loans would exceed the limit. In addition, most states have balanced-budget requirements that may bar them from accepting operating-budget loans. As a result, most states likely would not be able to accept federal loans.

Some help that would be.