Dollar notes are displayed in a pyramid.
Dollar notes are displayed in a pyramid. - 
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JEREMY HOBSON: For many states this is the last week of the current fiscal year. Which means it's budget time. And a lot of states are dealing with big budget shortfalls. Minnesota faces a possible shutdown. New Jersey is considering taking a risky loan from JPMorgan to make ends meet. And here in California, a just-reached budget deal to close a $10 billion gap relies on rosy forecasts for tax revenues.

Tracy Gordon is a visiting fellow at the Brookings Institution and an expert on state budgets. She joins us now. Good morning.

TRACY GORDON: Good morning

HOBSON: Well, what do you make of California's solution?

GORDON: Well, states are really facing a difficult situation. They've had a couple of years where they were really walloped by the recession and revenues were way down. They're just starting to come out of that but they have a big hole to come out of. Voters are pretty resistant to tax increases and Governor Brown's been pretty unsuccessful in getting republicans to agree to even put them on the ballot so, you know they're sort of caught between a rock and a hard place and forced to rely on what some people might call gimmicks or one-shot solutions.

HOBSON: Are gimmicks just a way of pushing the problem down the road?

GORDON: That's right, and fortunately, there's actually a group coming together right now -- formally Lieutenant Governor Ravitch in New York and Paul Volcker -- are starting to look at some of the long-term liabilities of states and put more focus on those issues. And I'm hoping that you know, that will help educate voters and legislators and governors alike. And we can have a conversation about you know, some of these long-term liabilities, some of the long-term costs of the policies.

HOBSON: Tracy Gordon, visiting fellow at the Brookings Institution. Thank you so much for joining us.

GORDON: Thank you.