Posted on 02/01/2011 9:57:35 AM PST by NormsRevenge
WASHINGTON (Reuters) - State tax revenues continued to strengthen at the end of 2010, but even with that improvement the long-term outlook for most states "is still ominous," the Rockefeller Institute of Government said in a report released on Tuesday.
"State fiscal recovery will be exceptionally slow and much longer compared to the prior recessions," said the group, which tracks states' finances and economies.
Record revenue declines during the recession, increasing demands for more spending, and unemployment rates that remain nearly double their pre-recession levels mean that full economic recovery for many states will take several years, according to the New York-based group.
The institute's preliminary figures for the final three months of 2010 show that tax collections were up 6.9 percent compared to a year earlier.
...
Mass layoffs and the housing bust hit all sources of state revenue and also increased the number of people relying on aid such as unemployment benefits. Because all states except Vermont must end their fiscal years with balanced budgets, they had to cut spending or raise taxes.
STIMULUS FUNDS DWINDLE
Despite the official end of the recession in 2009, states continue to struggle. That has prompted investors in the $2.8 trillion municipal bond market to dump their bonds, economists to warn about a drag on the national recovery, and federal lawmakers to consider the radical step of allowing states to declare bankruptcy.
State governments are especially eager for signs of healthy revenue as the federal government spends the last of its $814 billion economic stimulus plan, which included the largest transfer of federal funds to states in U.S. history.
(Excerpt) Read more at finance.yahoo.com ...
maybe we uhhh just need more uhhh stimulus and more regulations uhhh and “reforms”.
ominous for the public sector,gubmint unions will do just fine.
Don’t tell the public unions
‘State revenues growing, but outlook “ominous”’
Especially when the States keep outspending their revenues!
Just as states recover, they’ll get swamped by a massive (50%) increase in the size of their Medicaid programs in 2014. The feds will pick up the lion’s share of this cost initially, but then more an more will get shifted to states. In most states, Medicaid is the single largest slice of state budgets (followed closely by education), accounting for about one quarter of spending. Imagine having to increase by 50% some line item in your family budget (e.g., your mortgage) that took up 25% of the total. How crunched would you feel?
States used to have rainy day funds, but most of these have been wiped out by the last few years of anemic economic growth. Thus, Obamacare will put them between a rock and a hard place. Yet one more argument for just killing this monstrosity before it kills us.
Let’s keep their outlook is “ominous.”
It means we’re keeping our OWN money.
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