According to a new U.S. Government Accountability Office (GAO) report, state and local governments are going to have a tough time making ends meet.  GAO researchers wrote,

One way of measuring the long-term fiscal challenges faced by the state and local government sector is through a measure known as the “fiscal gap.” The fiscal gap is an estimate of the action needed today and maintained for each year going forward to achieve fiscal balance during the next 50 years. We measured the gap as the amount of the spending reductions needed to prevent negative operating balances. As shown in figure 2, under our simulation, state and local sector expenditures rise considerably as a percentage of GDP during the simulation time frame. We calculated that closing the fiscal gap would require action to be taken today and maintained for each year equivalent to an 18 percent reduction in the state and local government sector’s current expenditures. Closing the fiscal gap through revenue increases would require action of similar magnitude through increases in state and local tax revenues. More likely, closing the fiscal gap would involve some combination of both expenditure reductions and revenue increases.

Got that?  In order for state and local governments to close their projected “fiscal gap” or deficit, they will have to reduce spending or raise taxes by 18 percent, starting today and ending never.

By the way, massive increases in health-related costs, which show no signs of slowing, are the primary cause of the fiscal gap.