Posted on 08/18/2005 9:31:15 AM PDT by NormsRevenge
OLYMPIA, Wash. - State tax collectors are unexpectedly busy across America, and many states have built strong reserves that exceed Wall Street's recommendations. Yet lawmakers and governors are worried.
A new report from the National Conference of State Legislatures says state budgets are in the best shape in five years, thanks to "robust" tax collections and tough budgeting.
Collectively, the states have reserves of 7 percent, almost twice what they projected and well above the 5 percent cushion that Wall Street suggests.
But the same report, released Wednesday at the legislative group's convention in Seattle, said the pressure to spend money, especially on Medicaid, education reform and other programs, threatens to quickly erode the gains.
The report also noted that as the federal government tries to balance its own budget, more costs could shift to the states that would derail their budgets.
It's an odd time for the states, adding revenue and building up healthy reserves, while anxiously girding for more budget battles, said Corina Eckl, NCSL's fiscal program director.
"We have turned the corner on the most recent fiscal crisis, but that doesn't mean there aren't spending crises looming," she said.
Spending pressures are expected to outpace state revenue growth, she said.
"For the moment, I'm grateful," said Michael Calvert, Nebraska's legislative fiscal director. But he quickly referred to the storm clouds on the horizon, and said, "I don't know if financial people ever relax."
Many states need to worry about how to sustain their budgets, Calvert said. Some lawmakers will be tempted to provide tax relief or spend more money, but sizable reserves will be needed just to keep up with federal mandates and other unavoidable costs, he said.
"It's a difficult balancing act," he said.
The national conference's president, Maryland Delegate John Hurson, a Democrat, said Congress likes to "impose a one-size-fits-all approach" on the states and shoves costs onto them.
"While we've turned the corner on this budget crisis, it's only a recent development at this point, so we're still feeling the effects and will for a while," he said.
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On the Net:
NCSL: http://www.ncsl.org
States' Budget Woes Subside for Now
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Uhh, David?
Come on out to California sometime and try and peddle this ...
"States' Budget Woes Subside for Now"
I like the "FOR NOW" that AP slipped in the title. There is no such thing as good economic news (at least not while Bush is in office).
States hiring drunken sailors as budget consultants.
Let the spending orgies begin. AGAIN
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