The Census Bureau is out with its data on state spending and revenue for FY 2009, the first year of the Great Recession. Now the numbers are up on usgovernmentspending.com. They make for pretty interesting reading. If you look at usgovernmentspending.com's 5-year chart of state spending, It looks like spending is heading on up, without a pause.
Actually, the numbers for 2009 are down from the usgovernmentspending.com "guesstimate", which shows that politicians are getting serious at last. Will we see significant spending cuts next year when the FY 2010 data come out? Will the politicians make usgovernmentspending's current "guesstimate" for 2010 look like reckless alarmism? We'll see.
The big story, of course, is in state revenue. Look at the following chart of state revenues.
What on earth is going on? How could state government revenue be cut in half in one year? I will tell you.
There is one number that dwarfs all the others. It is the $525 billion investment loss in state government retirement systems. That is what brings the state government revenue number down to $664 billion. Hopefully, of course, in 2010 the state government retirement systems will show a healthy investment gain. Hopefully.
If we discount the $0.5 trillion loss in state pensions, that means that the states were spending $1,330 billion against revenue of $1,189 billion. That's a deficit of a mere $141 billion. So that's all right.