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Cost Reduction Strategies for State Governments

Persevering in the continued downturn

Faced with one of the worst economic recessions to hit America in the last few decades, state governments are experiencing severe budget cuts. General fund expenditures in fiscal year 2009 declined by 2.2 percent compared to the previous year. And the outlook for the foreseeable future is no rosier. The National Association of State Budget Officers estimates that states will likely face $230 billion in budget gaps from now through FY 2011. The Center on Budget and Policy Priorities forecasts an even bleaker picture: a cumulative state fiscal gap of $350 billion by the end of FY 2011. The bottom line: the state budget crisis is not going to go away this year or even next year. Systemic, structural changes will be needed. What else can states be doing now to continue to address their budget issues?

Explore our latest thoughtware and resources on this issue below.

Featured Insights

	Red ink rising This Deloitte Research report explores the fiscal challenges posed by the current economic landscape and provides a framework for governments to address these issues in order to navigate a successful journey.
	2010 Gubernatorial Elections Resource Guide: Closing State Budget Gaps The state government response to the budget deficits to date has included slashing programs and head count, often involving painful choices. These are still not likely to be enough. Reduced expenditure, increased layoffs and raising taxes work against the principle of counter cyclical spending and can push the economy deeper into a recession, causing second-order adverse impact on state budgets. What other options do state governments have to eliminate budget deficits now and ensure long-term sustainability of government finances?
	State Governments: Persevering in the Continued Downturn Governor Ridge, senior advisor to the state government practice, Deloitte LLP, and Bob Campbell, U.S. State Government leader, Deloitte LLP discuss creative strategies governors and other state government leaders can employ to refresh their perspectives and preserve in this struggling economy.
	Cost Reduction Strategies for Budget-Constrained Governments In response to the economic downturn, governments have had no choice but to reduce costs. However, the time is now to start building flexibility to be better positioned for immediate mobility when the economy turns around.
	Making the Most of the Economic Downturn: Seven Steps States can Take TodayInstead of producing “quick fixes,” tough times should be a catalyst for deeper changes that improve long-term prosperity and withstand unpredictable budget cycles and shifting demographics.
	Mastering Finance in Government: Transforming the Government Enterprise Through Better Financial Management The survey report discusses the global state of public sector finance transformation and provides a baseline for agencies to benchmark their progress.