There is a news out there stating that unless states comes up with additional funds, the school funding will be out by billions of dollars once the federal stimulus money runs out later. This is a fundamental problem with state revenues. When times were flush (when economy was artificially growing) state employees were promised billions of dollars like printing press printing non existent money. Every body was fine and dandy getting the raises and the bonus that they thought they were entitled too without knowing that the money was just bogus money. Now that the economy has gone down the drain and the cuts are being implemented every where, these states are scrambling to come up with funds which may not be there.
In the past the states used to raise property taxes but with the value of the properties plunging all over and the unemployment rate soaring, the tax revenues are not there as it use to be. The dependence of the states on the Federal stimulus funds was a one time deal which has delayed the inevitable task of raising funds in the future. Either you cut the entitlement and raises of state employees or raise the taxes. Both are not the choices that the politicians like so they keep on bickering every year at budget time not to hurt their constituents but it will have to happen one day and the time to do it is coming sooner than they would like to think.
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