Upcoming Foreclosures

Why is the economy affecting the state governments so much? People still have to pay taxes? Foreclosure?

I mean even if there is foreclosure, why are they losing so much money? People still pay their taxes, and still buy things?

Public Comments

1. Income is down, revenues are down. A lot of tax revenues are based on corporate profits (also down) and capital gains from stock market profits (not much there either). Also, federal funding is down, meaning states have to make up the difference. With unemployment up, there are more strains on state spending, further exacerbating the problem.
2. No. Number of people employed and paying taxes is down, People are not spending so sales tax collections are down. Unemployment is up so that drains the state coffers, Foreclosed homes do not pay property tax or school taxes so the state need to make up the difference And the biggest drain is States refuse to cut spending and keep increasing the entitlement programs. Thus budget gaps become greater.
3. People lose their jobs. They cut back expenditures. Sales and income tax revenues plummet. Foreclosures whack property values and kill sales. Property tax revenues drop. Housing sales plummet. Real Estate agents lose their jobs or incomes. And the snowball keeps rolling down the mountainside.