A national task force, chaired by former Federal Reserve Chairman Paul Volcker and former New York Lieutenant Governor Richard Ravitch, yesterday warned that “the ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened” by a budget crisis that will only continue in coming years.
States, the Task Force concluded, are not out of the woods yet, even though revenues have finally started to recover from the recession. Rather, a series of fiscal threats promise continued budget pain. Specifically, federal deficit reduction, underfunded public employee pensions, health care inflation, eroding and volatile tax bases, distressed local governments, and opaque budget practices will severely restrict states’ abilities to make vital investments in education and infrastructure, the keys to our future.
Stay tuned for a forthcoming CT Voices report on precisely this topic.