About two months ago I wrote a post called Cities, Villages, Towns… You’re In Trouble. I was pointing out how the tax base and industries such as housing have tanked so much that many regions across the country were in serious financial distress with no real way to get out of it.

At that time I thought about including states into the mix, but thought it might seem a bit too alarmist, even if obvious, but after a 60 Minutes story on that very thing last night, I now figure I waited so it would give me an extra blog post to write.

Everyone knows about the problems California has. I know about the problems New York has had, as well as New Jersey. But I hadn’t realized it was as pervasive as it is for states across the country. Illinois, for instance, is in such a state of disarray that there are bills they’ve stopped paying and are working hard to get concessions from unions throughout the state to give back or delay some of what they’ve fought to get.

What has happened because of Illinois’ difficulties? When they don’t pay bills other people don’t get money and either can’t survive or have to take drastic actions of their own. Some state representatives have been thrown out of their offices because rent hasn’t been paid. Many state projects, some earmarked because they would create jobs, are on hold because there’s no money to even start the projects. Some health care providers aren’t being paid Medicaid money because the state doesn’t have it. That’s really scary stuff.

I’m staying out of the union thing, mainly because I feel governments have known for a long time that they were financially unsecured yet made deals anyway. There comes a time when one has to make the hard decisions for the better good overall, and I don’t blame unions one bit for doing what they had to do, but the states probably needed to do what they had to do. Then again, in New Jersey they killed off 1,300 teacher positions and reduced expenses more than $10 billion, and are still $10 billion in the hole.

The reality is that the congressional deal won’t help states or cities out one bit. Unemployment doesn’t help the states either. It might be time for more creative ways of handling some business. I’m not the guy to do all the thinking without knowing all the things that go on, but a suggestion would be to have more video conferences rather than sending everyone to meetings across the state. That would save money on gas and office space and electricity. True, it shuts down some of the back channel negotiating that helps get some bills passed and others killed, but it doesn’t have to be a permanent thing.

Either way, there are no states that are immune to the financial crisis occurring right now. And there doesn’t appear to be anything on the horizon to help solve the problem either.

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