CNNMoney.com senior writer Tami Luhby today posted a report that much of New England – including Maine – missed being placed on a pretty unfortunate top-10 list – the top 10 states facing fiscal peril.
OK, so the story was about the top 10 and not on how much of New England missed making the list, but it is true that much of New England did miss making the list. The bottom half of the story also makes a pitch for more federal stimulus money going to states because the federal government did not realize the severity of the nation’s economic problems when the Recovery Act was passed in February.
The story reports on a Pew Center on the States’ analysis of the 50 states’ current fiscal situation based on several criteria – loss of state revenue, size of budget gaps, unemployment and foreclosure rates, poor money management practices, and state laws governing the passage of budgets.
My current home state, California, tops the list and neighboring states, Nevada and Oregon, also are on the list. Rhode Island is the only New England state on the top-10 list.
The online story also has interactive maps to show the percentage of unemployment and the percentage of foreclosures in each of the 50 states. Rhode Island, according to the maps, has 13 percent unemployment and a 7.57 percent foreclosure rate.
Of Rhode Island Luthby wrote: “The Ocean State has among the highest unemployment rates in the nation and among the highest foreclosure rates in New England. High tax rates, big budget deficits and a lack of high tech jobs are hurting its chances to pull out of the doldrums. State government has a poor record of managing its finances.” There is also a link in Luthby’s story to a previous story about the Rhode Island government avoiding closing down, never a good thing for a government.
A chart with the story indicated that the state of Rhode Island’s revenue change is -12.5 percent and the current budget gap is 19.2 percent. Seven other states on the list have a higher budget gap. (California topped that list with a -16.2 percent change in revenue and a budget gap of 49.3 percent. Yep, 49.3 percent.)
According to the interactive maps with the story, the rest of New England is faring better:
Maine: 8.5 % unemployment; 6.83 % foreclosure
New Hampshire: 7.2 % unemployment; 4.89 % foreclosure
Vermont: 6.7 % unemployment; 3.73 % foreclosure
Mass.: 9.3 % unemployment; 6.68 % foreclosure
Conn.: 8.4 % unemployment; 6.03 % foreclosure
By the way, California’s unemployment rate is at 12.2 percent and the foreclosure rate is at 10.81 percent. Nevada is at 13.3 percent and 15.62 percent, respectively. Interestingly, Nevada is the only state on the top-10 list that had a positive revenue change in the budge year – it was up 1.5 percent.
Of California Luthby wrote: “The Golden State’s housing collapse – and resulting unemployment surge – has plagued the state’s economy. The weakening economy prompted revenue to fall by nearly a sixth between the first quarters of 2008 and 2009. State lawmakers have limited ability to deal with California’s massive budget gap due to several voter-imposed restrictions, including requirements that all budgets and tax increases pass the legislature by a two-thirds majority.”
And of Nevada: “Nevada is one of the recession’s big losers as its gaming-based economy suffered. Year-over-year revenue has fallen for two consecutive years, a record. But changing tax laws is tough because some are written into the state constitution.”
I grew up in Maine’s timber belt. I suppose that is much of the state, but I am talking about Aroostook County. And I have heard that high-tech firms are moving up from Massachusetts. So, I was also interested to look at Oregon, which also made the top-10 list, because it also has a timber industry and high-tech jobs.
Luthby wrote: “Oregon’s leading industries, such as timber and computer-chip manufacturing, have been hit hard in the recession. Lawmakers have approved more than $1 billion in new taxes to keep it afloat. But voters in January will have the final say on another $733 million in new income taxes.”
Oregon’s unemployment rate is at 11.5 percent, but the foreclosure rate is a pretty low (comparatively speaking) 4.99 percent. Unfortunately, revenue change for the Oregon government is at -19 percent and the budget gap there is at 14.5 percent.
I am sure these numbers make most people’s head swim. And I know they won’t help anyone pay their bills at the end of the month. But people can look at them simply to compare where their states and regions stand compared to the rest of the country.
Maine and much of the rest of New England may not be in a great place just yet, but there are a few places worse – Michigan, California, Nevada and the rest of those states on that top-10 list. Maybe optimism born from that fact will help seed economic growth in New England.
My name is Keith Michaud and this is “Letters From Away,” a blog written by a Mainer living outside the comfortable and sane confines of New England. The blog is intended for Mainers, whether they live in the Pine Tree State or beyond, and for anyone who has loved ’em, been baffled by ’em or both. Ayuh, I am “from away.” Worse still, I live on the Left Coast – in California. Enjoy! Or not. Your choice.
Letters From Away 