Don't miss Virginia Postrel's "State of the States" posting. She quotes the following from USA Today on those poo, impoverished state governments:
The printed sidebar includes a great chart, unavailable online,
that shows the average annual change in each state's budget
from 1997 to 2002 and the projected change for 2003. Examples:
California's state budget grew 9.4% a year from 1997 to 2002
and is projected to shrink by 0.2% this year; Colorado's grew
8.1% a year and is shrinking 2.7% this year; Virginia's grew
8.0% a year and is projected to grow 1.6% this year.
A 9.4% annual growth rate means a doubling of the state budget every seven-and-a-half years.
Regardless of how one feels about Keynesian stimuli, state spending ought to be countercyclical on simple grounds of responsiveness to need. There is something perverse about having to cut spending (even if by .2%) at the moment when legitimate claims on unemployment insurance and poverty relief are rising. But that means that spending should fall during the flush times. Instead, the states went on an astonishing spending binge during the second half of the 90s.