Economic Crisis — State perspective

Further evidence that the recession is worsening – Michigan and New Jersey are both dealing with the highest unemployment in more than a decade. According to the Detroit Free Press, joblessness in Michigan, which has the nation’s highest unemployment rate,  rose to 10.6 percent in December. That was a 1 percent increase from the previous month. Michigan unemployment crested at 16.9 percent during the 1982 recession.
 

New Jersey also saw a 1 percent increase in unemployment last month. Its jobless rate in December was 7.1 percent. The Newark Star-Ledger reported that the increase is  triggering worries that the drain on the state's unemployment insurance fund will trigger automatic payroll-tax increases for businesses.  However, the newspaper quoted a Rutgers University economist as saying New Jersey may see less-severe job losses than the rest of the country because of the makeup of the state's economy.
 

Surging joblessness is leading to increased enrollments in Medicaid, the state-federal health insurance program for people with low income. In a number of states, Medicaid populations grew 5 percent to 10 percent in the last 12 months and, in many, the growth rate was at least double what it had been in the previous year, The New York Times reported. It said because enrollment often lags job losses by several months, the growth in 2008 may represent only the leading edge of heightened demand. The economic stimulus package now taking shape in Washington, D.C., is expected to provide billions of dollars to offset increasing state Medicaid costs, easing what otherwise might be a back-breaking strain on state budgets.

Utah’s effort to cut costs by putting state government on a four-day workweek isn’t producing the savings that had been expected. The Salt Lake Tribune reports that state officials had hoped to realize a savings of $3 million annually in reduced energy costs, but that projection now appears overly ambitious.
 
Colorado is considering having state employees take one day of unpaid leave each month for the rest of the year to close a $1 billion gap between projected spending and revenue, the Denver Post reports. It said workers in critical positions — such as Colorado State Patrol troopers, prison guards and 24-hour caregivers — would be exempt. During the last recession in the early part of the decade, the newspaper said, lawmakers considered, but did not implement, furloughs. It said the state has more than 60,000 employees, slightly more than half of whom work for colleges and universities.