Just like the Federal Government, most states are running deficits. However, unlike the Federal Government, states can't print money to cover those deficits. In order to balance the budgets, many governors not only want to cut spending, but also don't want to increase taxes. However, Iowa Governor Terry Branstad wants to bring new business to the state by lowering the state's highest corporate tax to 6%, which would cut it in half.
These new measures are being proposed by both Republicans and Democrats. Shrinking government seems to be in vogue these days. It seems as though nothing is off the table when it comes to funding cuts:
- State Medicaid reimbursements to doctors and hospitals
- State agencies (which means fewer employees)
- State funding to universities
- State funding to mental health institutions
Unfortunately, this could mean some needy folks won't have services which are desperately needed that they couldn't otherwise afford. Some of the burden of the funding cut from the state level will be shifted to local governments, which could translate into higher sales taxes, school taxes, or property taxes, during a time when consumers can barely afford the necessities. Or worse, some people in need will have to do without. Students will be shouldering some of the shortfalls from lack of state funding in the form of higher tuition costs.
The bottom line is we are all going to have to make some real sacrifices; either we don't have services that make our lives easier and happier, or we pay the price, or both. That means we have less money left over for the things we want.
What will you have to give up?