Since November 2008, the economic crisis led to the destruction of more than 400,000 jobs at America’s 500 largest public corporations, according to Forbes. Millions more have been lost at medium and small businesses.
One immediate consequence of this huge loss of jobs is a dramatic decline in tax revenue.
Over at California High Speed Rail Blog, Robert and Rafael have described the consequences of the economic crisis on California’s state government. The state is facing a $40 billion budget shortfall, and Governor Arnold Schwarzenegger – if Republicans in the State Senate aren’t willing to give in on their demands – may have to fire 10,000 employees and stop 275 state public works projects. Democrats only need 3 Republican votes to pass the bill (it needs a 2/3 majority), but members of the GOP are unwilling to sign on to the bill because it includes tax increases necessary to plug the budget’s gap.
The California High-Speed Rail project, which will send 220-mph trains from San Francisco to Los Angeles in ten years, will be incapable of signing construction and design contracts, at least until the state gets its act together.
But California isn’t the only state with a massive budget problem. Cities like Charlotte, Denver, and New York have been fighting for the future of their public transportation networks as they face impossible budget situations, even as transit ridership continues to increase. Other states and municipalities almost everywhere around the country are facing huge cuts, and the federal government’s commitment to state budget aid – about $50 billion in the stimulus bill to be signed this afternoon – won’t be nearly enough to cover the hole.
Soon enough, Washington is going to have to step in once again, or state and local governments will themselves be adding to unemployment rolls. The infrastructure projects the United States desperately needs to improve its “D” report card grade won’t be built unless the government takes on more debt, paying for employees to build more railways, bridges, and roads.
The campaign for stimulus package #2 must begin today.