With a New Fiscal Year Beginning, States’ Budgets Are in Crisis

There are only four states — North Dakota, Alaska, Arkansas and Montana — that will not run a budget deficit in the next fiscal year, which for states, though not the federal government, starts on Thursday. All 46 others plus the District of Columbia will be in the red — with all but five running deficits above five percent and 21 states running deficits above 15 percent. (A quirk: California is in bad shape dollar-wise. But relative to the size of its budget, it is in better-than-average condition.)

I’ll be looking at this phenomenon closely this week, particularly in light of the collapse of the jobs bill and the stall-out of the bill to keep state workers employed. But for a 30,000-foot view, here is a chart I made with data from the Center on Budget and Policy Priorities. For all of the states running deficits, it shows each state’s projected fiscal year 2011 shortfall in dollars, and then shows what percentage of each state’s 2010 budget that is. The numbers are pretty harrowing: