As I have said before, the reason senators don't like to support state budgets in a recession is because state governors then run against senators and take their jobs:
Tami Luhby: Senate moves on jobs: NEW YORK (CNNMoney.com) -- States are looking to the federal government for more help balancing their budgets, but the Senate is not heeding their call. Federal aid to the states was among the top priorities in an early Senate job creation bill, as well as in a $154 billion measure passed by the House in December. But it has fallen off the list as Senate Democrats look to craft legislation that will attract bipartisan support. Senate Majority Leader Harry Reid, D-Nev., on Thursday unveiled a jobs bill that does not contain state aid. A Senate Democratic aide said Reid hopes to back a state aid measure in the future. Republican support, however, remains questionable.
Experts and state officials say they need to know now whether they'll get more funds. Governors are currently crafting their budgets and, for many, it will be their third year of contending with massive deficits due to declining tax revenues. States are looking at a total budget gap of $180 billion for fiscal 2011, which for most of them begins July 1. These cuts could lead to a loss of 900,000 jobs, according to Mark Zandi, chief economist of Moody's Economy.com...
We need a much better class of senators than we have.
As a work-around, I suggest that the Federal Reserve support state-level deficit spending in this recession by offering to purchase state government bonds at high values--at Treasury borrowing rates, in fact--if the bonds are accompanied by sound long-term amortization plans.
It would help.