“We’re approaching the cliff, and hopefully it’s a climbing down and not just jumping from the cliff,” Ganeriwala, Virginia’s treasurer, said today at the State & Municipal Finance Conference hosted by Bloomberg Link in New York.
If Congress doesn’t agree on how to reduce the federal deficit, states may lose funding and jobs when $600 billion in automatic tax increases and spending cuts take effect in January, said Ganeriwala, 56, who will head the association next year. That may further hinder progress for governments that cut jobs as tax revenue fell. The number of public positions in 2011 shrank by 1.3 percent, about 280,000 positions, according to data from the U.S. Department of Commerce. More than half those positions were from state and city administrations.
States already are confronting the “stupidity factor” of Congress’s waiting until the last minute to act, said Chipman Flowers Jr., the Delaware treasurer.
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