The next shoe to drop…
(…) Many states eliminated expected deficits earlier this year with budget cuts, tax increases, short-term borrowing, accounting moves and planned gambling expansions.
But despite a slight improvement in the U.S. economy, states are now finding those measures didn’t go far enough. Tax collections continue to trail projections in some states, and court rulings and political battles have blocked some gap-filling moves.(…)
A Dec. 2 report from the budget officers’ group and the National Governors Association said states have cut $55.7 billion from budgets in the current fiscal year, which for most began July 1. Even with the cuts, deficits total $14.8 billion. States’ general-fund spending is expected to decline 5.4%, the sharpest drop since data collection began in 1979, the groups said.
States also have enacted tax and fee increases expected to raise $23.9 billion, the largest hike the group has recorded.(…)
States filled 30% to 40% of their budget gaps with federal stimulus money. They were allotted about $250 billion of the $787 billion stimulus package, most of which will have been disbursed by the end of next year.
The U.S. House on Wednesday passed a separate $154 billion package that includes $23 billion for states to pay teachers’ salaries and $23.5 billion to pick up some state Medicaid costs.(…)
Related posts:
- States’ Budget Gaps Are Another Test for Washington
- More States Look to Raise Taxes
- Pinched States Wrestle With More Cuts
- CBO: 600,000 to 1.6 Million Employed by Stimulus
- THE STATES OF THE UNION: BEYOND CALIFORNIA
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