To me, things seem tough in Washington state. With a $4.5 billion deficit for the next budget year, the governor is proposing a 6 percent cut in state spending.
However, Washington is third on the list of states doing the best in one study.
In a report for Fortune/CNNMoney.com, Meredith Whitney, who predicted the financial crisis, rates the 15 largest states on their economy, fiscal health, housing, and taxes.
The states doing the worst:
1. California
2. New Jersey, Illinois, Ohio (tie)
3. Michigan
4. Georgia
5. New York
6. Florida
The states doing the best:
1. Texas
2. Virginia
3. Washington
4. North Carolina
The states that are neutral:
Pennsylvania, Maryland, and Massachusetts
The study warns that the giant gap between states' spending and their tax revenues, estimated at $192 billion or 27% percent of their total budgets for the 2010 fiscal year.
About her study on the states, Whitney said:
I see a lack of transparency and an abundance of complacency on the part of investors and politicians, just as we saw before the banks imploded.
She said she couldn’t stop working on the research once she saw the overall bad financial shape states are in.
This certainly is a huge concern as the financial health of state government affects jobs, economic development, and services to help the unemployed and homeless.
Whitney said states are dealing with their financial problems by raiding pension and health care funds. This doesn’t seem like a good strategy to me.
