Improved Tax Collections Can’t Keep Pace With States’ Fiscal Needs, Survey Finds
By MICHAEL COOPER
NYT
Half the states plan to cut spending on higher education, and nearly a third plan cuts to elementary and high schools. Public assistance and transportation face cuts. Eighteen states have proposed slashing aid to struggling cities and local governments. Some states will raise taxes or fees. Others plan to lay off workers, or cut their salaries or benefits.
Although state tax collections are picking up after several brutal years, a new survey by the National Governors Association and the National Association of State Budget Officers found that states still expect to collect less tax revenue and spend less money in the coming fiscal year than they did before the Great Recession began. At the same time the cost of Medicaid, the biggest single portion of state spending, has been rising, driven up by higher enrollment as many people have lost their jobs and their health insurance.
Improving tax collections do not appear to be enough to make up for the end of the federal stimulus money, which had helped states stay afloat. “I use the simple, probably oversimplified analogy that you got a raise, but your bills are coming in higher than the amount of the raise, growing more than the raise,” said Scott D. Pattison, the executive director of the budget officers’ association.
Many states are still putting the finishing touches on their budgets for the 2012 fiscal year, which for most begins on July 1. But the report, which is being released on Thursday, found that states planned to spend a total of $668.6 billion from their general funds next year — more than they spent this year, but $18.7 billion less than they spent in 2008.
(More here.)
NYT
Half the states plan to cut spending on higher education, and nearly a third plan cuts to elementary and high schools. Public assistance and transportation face cuts. Eighteen states have proposed slashing aid to struggling cities and local governments. Some states will raise taxes or fees. Others plan to lay off workers, or cut their salaries or benefits.
Although state tax collections are picking up after several brutal years, a new survey by the National Governors Association and the National Association of State Budget Officers found that states still expect to collect less tax revenue and spend less money in the coming fiscal year than they did before the Great Recession began. At the same time the cost of Medicaid, the biggest single portion of state spending, has been rising, driven up by higher enrollment as many people have lost their jobs and their health insurance.
Improving tax collections do not appear to be enough to make up for the end of the federal stimulus money, which had helped states stay afloat. “I use the simple, probably oversimplified analogy that you got a raise, but your bills are coming in higher than the amount of the raise, growing more than the raise,” said Scott D. Pattison, the executive director of the budget officers’ association.
Many states are still putting the finishing touches on their budgets for the 2012 fiscal year, which for most begins on July 1. But the report, which is being released on Thursday, found that states planned to spend a total of $668.6 billion from their general funds next year — more than they spent this year, but $18.7 billion less than they spent in 2008.
(More here.)
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