FY 2011 is a year in which states are having to reset their expectations. The stimulus is spent and the federal government is not likely to appropriate more to filling state budget gaps. Pamela Prah writing at Stateline reviews the reforms that are being considered which include block-granting Medicaid, and allowing states to declare bankruptcy.
While many officials know the future isn’t bright for state budgets, they haven’t quite admitted to exactly how big the bills are. States are still calculating their pension obligations based on flawed assumptions.