The State of the States in the SOTU

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January 26, 2011; Source: Taking Note (the Century Foundation) | The Century Foundation’s Richard Leone noted in a blog post yesterday that President Obama’s State of the Union speech lacked a White House commitment to help the states whose budgets are in financial freefall. He suggested that governors and other state and local officials might have been disappointed with the SOTU.

He didn’t mention all of the nation’s nonprofits whose programs are often keyed to delivering state and local government funded services. In legislatively dysfunctional or budgetarily shell-shocked states such as California, Illinois, and New York, nonprofits must be looking at this situation with horror.

Leone could have simply cited Republican House Majority Leader Eric Kantor who a couple of days ago announced that there should be “no bailout of the states.” According to The Hill, Kantor “doubled down on his opposition to new proposed spending on infrastructure and education, even in areas, like transportation, where he acknowledged there were deficiencies.”

Leone’s prescriptions for the states include placing a sales tax on Internet transactions, correcting (or stemming) the growth of reliance on gambling and lotteries as regressive revenue-generators, and renegotiating relationships with public employees. But in the end, Leone thinks that “increased revenue sharing from the federal government makes a lot of sense (e)ven if it expands the deficit for a while . . .” But Leone, governors, and nonprofits didn’t hear that uttered by President Obama and know that it’s not going to be voiced by the Republican opposition either.—Rick Cohen