The Mother of All Credit Crisis
States depend on sales and income taxes for about two-thirds of their revenue, according to the National Conference of State Legislatures.
Projections made in March are already being revised downward. Property values dropping like a rock which force adjustments in property taxes. Sales transactions dropping like a flock of pigeons in Picadilly Circus. And massive layoffs going to gut income tax revenues.
Florida has already cut its revenue estimates by a billion dollars since March. CA, the most populous state in America, has been increasing its deficit estimate by about $4 Billion every other month....expect the new number to jump from $16 Billion to $20 Billion in a few weeks(About $600 for every man, woman, and child....whoops, now we know where Calfornians should send their tax rebates).
In the past few years, municipal and state governments have borrowed and spent trillions on new found income growth from rising property taxes and usage fees. Now that income is evaporating. Imagine what happens when municipal bonds start defaulting around America. Pension funds, Retirement planning, Bank Portfolios......