Not so cheery news continues...
As a follow up to yesterday's post, here are a couple more articles about the sad state of affairs for state government revenues.
Bloomberg (click here) reports that a survey of fiscal officials predicts diminshed state goverment revenues at least through 2012.
The only thing that kept states from “draconian” spending cuts has been $135 billion of funding under President Barack Obama’s economic stimulus package, according to a report from the National Governors Associations and the National Association of State Budget Officers. Revenue fell 7.5 percent in fiscal 2009, forcing states to close budget gaps of $72.7 billion.
“These are the worst numbers we’ve ever seen,” said Scott Pattison, executive director of the budget directors group, in a news release. “States have been forced to lay off and furlough employees, raise taxes, drain rainy day funds and sharply cut state spending.”
As the U.S. economy emerged from the worst recession since the Great Depression of the 1930s, local revenue will trail an economic rebound and continue its decline in 2010 before slowly returning to pre-recession levels by 2012, the report said.
The story goes on to note that there will be a lot of unmet needs during the recession and it will take years for states to rebuild their rainy day funds and catch up with deferred projects and deferred maintenance. This means that most states will not fully recover from this recession until late next decade.
Capitol Weekly (click here) also notes that California state officials see a bleak budget outlook through 2012 as well. The state's problems are compounded by the fact that many of the revenue fixes this year can't be repeated and some of the revenue enhancements (i.e. the sales tax increase) will expire before the recession is over.
The good news from reading between the lines in the article is the fact that the state may have to break down and actually reduce their spending instead of just punishing state and counties.
I've been trying to stay away from budget doom and gloom in my recent posts, but I felt like it was important to reinforce that we are still in the tunnel--and there is no light yet!
Bloomberg (click here) reports that a survey of fiscal officials predicts diminshed state goverment revenues at least through 2012.
The only thing that kept states from “draconian” spending cuts has been $135 billion of funding under President Barack Obama’s economic stimulus package, according to a report from the National Governors Associations and the National Association of State Budget Officers. Revenue fell 7.5 percent in fiscal 2009, forcing states to close budget gaps of $72.7 billion.
“These are the worst numbers we’ve ever seen,” said Scott Pattison, executive director of the budget directors group, in a news release. “States have been forced to lay off and furlough employees, raise taxes, drain rainy day funds and sharply cut state spending.”
As the U.S. economy emerged from the worst recession since the Great Depression of the 1930s, local revenue will trail an economic rebound and continue its decline in 2010 before slowly returning to pre-recession levels by 2012, the report said.
The story goes on to note that there will be a lot of unmet needs during the recession and it will take years for states to rebuild their rainy day funds and catch up with deferred projects and deferred maintenance. This means that most states will not fully recover from this recession until late next decade.
Capitol Weekly (click here) also notes that California state officials see a bleak budget outlook through 2012 as well. The state's problems are compounded by the fact that many of the revenue fixes this year can't be repeated and some of the revenue enhancements (i.e. the sales tax increase) will expire before the recession is over.
The good news from reading between the lines in the article is the fact that the state may have to break down and actually reduce their spending instead of just punishing state and counties.
I've been trying to stay away from budget doom and gloom in my recent posts, but I felt like it was important to reinforce that we are still in the tunnel--and there is no light yet!
posted by City Manager @ 7:02 AM
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