State deficits Governors seek federal aid to cover spending gap

The nation's governors are looking toward Washington to help bail them out of their financial straits with possible assistance in the guise of a second economic stimulus package.

States are facing tough financial times during the economic downturn with 18 states expecting $14 billion in deficits this budget year and 20 states predicting shortfalls in 2009 for a combined deficit of $34 billion. The states did not receive direct assistance in the $168 billion stimulus package that went mostly to taxpayers in the form of rebates ranging from $300 to $1,200 and in tax breaks to businesses. States, along with other governments, were not included in the plan.

However, at the weekend meeting of the National Governors Association, the states' chief executives talked about making a second try at getting federal aid by tying it to the critical task of maintaining and improving the nation's infrastructure of roads, water systems and bridges as part of a second stimulus package.

Building and improving the nation's infrastructure would create jobs in the long run, improve public service and generate income and tax revenue for the local municipalities, states and federal governments. It is a great way to win public support, but it is a long-term solution and not an immediate stimulus economists say is needed.

South Carolina is facing a $120 million shortfall, but its governor, Mark Sanford, questioned whether more spending was the way for states to go. "The idea of borrowing a bunch more money so we can then put it into our pockets so we can then repay it later, I don't think it is a great route to go," he said.

While some infrastructure improvements are in the works, it would take years for many of them to move forward. They are worthy of federal support through the normal budget process, but not necessarily through a stimulus package intended to ease pressure on states facing difficult choices in deciding how to close their budget gaps.