THEY PARTY, WE PAY

The Wall Street Masters of the Universe, speculators, realtors and all the others who made tremendous amounts of money seliing the Big ShitPile won't be much affected by the drastic reduction of public finances and public services. Arizona (and Tucson) will certainly be affected.


Mortgage crisis takes a bite out of states and cities

Tax revenue is down considerably across the nation, creating budget shortfalls and forcing hard choices on what to cut.
By Stephanie Simon, Los Angeles Times Staff Writer
December 31, 2007

DENVER -- Dozens of states, counties and cities across the nation will enter the new year facing deep and unexpected budget holes as the widening mortgage crisis cuts sharply into tax revenue.

"We're talking about a pretty tough fiscal environment for the next four or five years," said Christopher W. Hoene, the director of policy and research for the National League of Cities. "Libraries, parks, after-school programs . . . you'll see lots of questions raised about cities' abilities to fund them."

in a recent survey, 24 states reported that their tax collections had taken a hit because of the housing crisis.

The 10 most affected states, including California, Nevada and Arizona, will lose a combined $6.6 billion in tax revenue next year, according to a report prepared for the U.S. Conference of Mayors.

Even more distressing to budget planners is the decline in sales tax revenue. If people aren't buying homes, they're not buying refrigerators and washing machines to furnish them. ... On average, states receive about a third of their revenue from sales taxes.

In Arizona, state Sen. Bob Burns will spend his holiday poring over a budget that looked balanced six months ago but is now in the red -- with spending nearly 10% above what the state can afford, given the anemic pace of tax collection.

"Education and healthcare are usually politically untouchable, but we have to put those on the table now. We have to include just about everything, really," Burns said. "If we don't make some serious moves in '08 and '09, we'll be out of savings. And out of gimmicks."