A new study is showing that many states are heading toward an economic disaster. Everyone knows that California is facing a back breaking deficit. The state government decided to try and ease the crisis by increased borrowing but that hasn't worked and they are facing astronomical deficits.

This debt will most likely mean higher taxes, more layoffs of government employees, crowded classrooms, and fewer services in the nations most populated states. States most at risk for the next year and many years to come include Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island, Wisconsin, and of course California.

The Pew Center of the United States released a recent study that showed double digit gaps in the budget along with rising unemployment and thousands of home foreclosures. This study forced lawmakers to take a realistic look at the economic catastrophe and what actions should be taken in order to try and throw the system back on track.

Even though there are only ten states that made this list they account for almost one-third of the American population. This is a big deal and it affects every American whether you live in one of these states or not.  Economies and states are so integrated and linked that it affects everyone.

Susan Urah said "Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers." California is the most vulnerable state on the list but fellow states face the same hardships California does. California currently has nearly $60 billion in budget adjustments that must be made. This most likely means cuts to education, social service programs, temporary tax hikes, as well as stimulus spending.

Governor Schwarzenegger has estimated that the deficits for this year will run between $12.4 and $14.4 billion. By the end of this year the governor plans to have a spending plan in place. However, will this turn the economy around? Because of the global financial crisis in the last two years California has seen general spending decrease by $20 billion. Many Californians are wondering how they will face further tax increases and how their lives will change with all of the service cuts.

The government is telling residents that they have come a long way but drastic actions are still required. Previous cuts were frivolous and affected fewer people, but now government has to cut necessary funding which will affect growing numbers of people. These will be the most painful cuts for Californians.

Hopefully California and the other nine states will be able to make budget cuts that will affect fewer people and that will eventually turn their budgets around. These states still aren't out of the woods but with some planning and scrimping they will most likely be able to turn around and get on the road to recovery. Which in turn, will improve the economies and budgets in not only these states but the rest of the nation.
 

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