You're watching...
State Budget Crisis Task Force’s Richard Ravitch on the factors leading a number of state governments to potential fiscal disaster.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
So in case you hadn't heard states across the country are dealing with financial crises in fact a new report by the state budget crisis task force -- some disturbing trends.
And the balance sheets and sixth of the nation's most populous states.
They are in some serious fiscal trouble joining me now -- the co chair of the state budget crisis task force and former New York lieutenant governor.
Richard Ravitch so much for joining me on -- So let's get right to it and I -- very disturbed by this report and outlet for -- three of the biggest things that are coming down the pike for these states that are really making -- a financial crisis mean of course retirement obligations start starts and out.
But then also.
Medicaid expenses both retirement and Medicaid expenses.
Are increasing.
For most -- -- states.
At a rate far -- is in their revenues are increased.
-- in in in -- I mean you pointed out some staggering -- that it was in New York was at a quarter to 30% of the population.
Collected Medicaid he also said that.
A lot of the benefits are you know in some cases 78% beyond what is required by the facts.
That is that is true in many jurisdictions that just -- -- But the other side of the same coin news that revenues -- not growing as -- for a variety of reasons.
Lot of states lowered taxes.
A lot of states would not -- their sales tax collections keep peace.
We've the growth in expenditures because the number of transactions.
And consummated on the Internet generally escapes his taxes.
His taxes.
Are not going up -- the price despite the fact that the price.
Per gallon is going -- for the tax per -- is going up because.
As people use more more fuel efficient cars they consume -- that is so.
There's this Clinton would be between.
Level.
Revenue growth in the level of expenditure.
Well and it seems that's going to be pretty tough to solve because you trying captured on the revenue side -- you see people leaving your state.
Because they don't want to pay higher taxes -- look at their neighbors so it doesn't seem like necessarily consultant on the revenue side you gotta look at spending.
Well that's why Richard Nixon in the nineteen.
In 1969.
-- seven he concluded that the federal government was a better and more efficient tax collector.
Then states -- even though he influenced states where.
Better places in government to provide services to the public.
And therefore we have a revenue sharing plan with the taxes collected uniformly.
So it didn't produce that geographical dislocation.
Yeah that increasing the tax differential.
From state to state would produce.
So 68 states did you find are nearing disaster and how serious is the problem isn't worship where we -- six states not -- not necessarily the worst states.
We started California New York Illinois and New Jersey Texas and Virginia Texas and Virginia are nowhere in.
-- -- -- -- Illinois you or account for why what's Texas to right Virginia.
Well first of all the benefits they confer.
A substantial weakness.
It's an economically powerful and strong steady.
Because of their oil revenues.
And they've been to since we've covered bond people who -- -- -- -- -- on.
Public things them have.
Be elected officials in the Blue States.
-- in each state has its own specials.
Constitutional and statutory framework and its own unique sort.
Students to Brooklyn to -- at a time what happens to places like California as they head towards this clip when he how does that play out what's the danger -- Over getting really knows the full answer I think -- part of the answer is the we have to look at all of these proposals to reduce the federal deficit.
And do what nobody Estonia which is to measure the impact of those cuts are gonna have.
On stayed local governments and make sure that we understand all the consequences.
Of what we're doing in Washington and not just ones that we intent.
I guess I mean we just don't have enough money -- to pay any of these bills so it's it's very difficult situation the street now.
Are gonna have to do both we're gonna have to reduce expenditures.
And probably increase revenues of the same time.
All right we'll see Richard thank you for coming -- we --
