Wisconsin residents should brace for more tax increases and service cuts, based on an analysis that rated the state’s budget predicament among the 10 worst in the country.
The rise in unemployment and a steep drop in revenues from 2008 to 2009 suggest a dire future for a state that has struggled to fill perennial budget shortfalls, according to the Pew Center on the States and its report, “Beyond California: States in Fiscal Peril.”
The top-10 ranking puts Wisconsin in a dubious group with California, a state that issued IOUs to contractors earlier this year. Wisconsin is ranked ninth-worst, tied with Illinois.
“A challenging mix of economic, political and money-management factors have pushed California to the brink of insolvency,” said Susan Urahn, managing director of the Pew Center on the States. “But while California often takes the spotlight, other states are facing hardships just as daunting.”
States will slow the country’s climb out of the recession if they turn to tax increases or drastic spending cuts to balance their budgets, Urahn said. At a minimum, the shortfalls will lead to more furloughs of state workers, higher college tuition fees and less support for social services.