States in State of Shock

A budget crunch often offers an opportunity to introduce cost-saving efficiencies that would otherwise be too politically difficult to achieve. This blog entry was going to include some of the remarkable changes in practice that states are adopting in light of the current crisis.

Except they don't seem to be happening.

There are three possible explanations.

The first is that the magnitude of the crisis is overwhelming state legislatures, swamping their circuits, leaving no room for reform discussions.

The second explanations is that states are waiting to see if their Uncle Sam will bail them out. Indeed, the Senate version of the economic recovery package tabbed some $79 billion for states. States are waiting to see what their take will be before offering up politically challenging alternatives.

Colorado, for example, is in line for a cool $1 billion, leaving state legislators happily stunned. Said Rep. Mark Ferrandino, "It seems unbelievable." Rep. Don Marostica had the same reaction. "Shocking," Maristoca said. "I stood there and I was thinking, 'Did I hear this correctly?' A billion dollars just like that."

The third explanation is that many cost-saving reforms don't deliver hard dollars instantaneously. Only tax increases and service cuts do that--so reform has taken a back burner.