Nov. 11 (Bloomberg) -- At least nine U.S. states face similar fiscal strains brought on by the global recession as those that left California on the brink of insolvency four months ago, according to the Pew Center for the States.
Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin are dealing with declining tax revenue, resurgent deficits and increasing unemployment and home foreclosure rates, the center, a public policy research group, said in a report. All but New Jersey, Illinois and Wisconsin also have been hampered by a rule requiring a two- thirds legislative vote to approve tax increases, the report said.
Lawmakers in California, which accounts for 13 percent of the U.S. gross domestic product, have slashed $32 billion from spending, cutting into funding for schools, universities and welfare programs and raised taxes by $12.5 billion in the last nine months to close budget gaps brought on by the recession. Governor Arnold Schwarzenegger signed an $85 billion budget on July 28. The state expects another $14 billion of deficits over the next 19 months.
“California’s problems are in a league of their own,” the report said. “But the same pressures that drove it toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.”
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