Perfect Timing

From The Boston Globe:

Cities and towns across the state are diverting large sums of money to “rainy day’’ accounts even as they lay off employees and make deep cuts to schools and services, girding for what many believe will be a long period of austerity.

Municipal leaders give a variety of reasons — cuts in state aid, anticipated increases in health care costs, dwindling federal stimulus funds — but the financial stockpiling is also a signal they fear the funding enjoyed before the financial collapse will not return anytime soon.

“This is the new normal,’’ said Mayor Dean J. Mazzarella of Leominster, which set aside $3 million this year while it also made sharp cuts that included layoffs. “And we need to adjust.’’

The increase in savings is significant — even surprising. Municipalities saved, on average, more than 6 percent of their fiscal 2009 budgets, the highest rate since at least 1994.

Meanwhile, over in The New York Times...

Republicans who have taken over state capitols across the country are promising to respond to crippling budget deficits with an array of cuts, among them proposals to reduce public workers’ benefits in Wisconsin, scale back social services in Maine and sell off state liquor stores in Pennsylvania, endangering the jobs of thousands of state workers.

States face huge deficits, even after several grueling years of them, and just as billions of dollars in stimulus money from Washington is drying up.

With some of these new Republican state leaders having taken the possibility of tax increases off the table in their campaigns, deep cuts in state spending will be needed. These leaders, committed to smaller government, say that is the idea.

“We’re going to do what families and businesses all over this country have already had to do, and that is live within their means,” said Brian Bosma, a Republican who will soon become the speaker of the Indiana House, alongside a Republican governor, Mitch Daniels, and a supermajority of Republicans in the State Senate.

Of course if what Bosma said was true, they would have been cracking down on the credit card companies who've been flooding college campuses for the past two decades. Nevertheless, it will be interesting to see how eliminating all these state jobs plays in to the machinations of the Republicans in US House of Representatives, who were ushered in (partially) on the premise that they could address the high level of unemployment.