State Budget Woes
If your state is facing a serious budget deficit, you are not alone. This article from the Council on State Taxation (COST) highlights some states in dire fiscal straits.
Status of the States: Deteriorating Budget Conditions Necessitate Cuts & Special Sessions
Fiscal year 2009 commenced for most states on July 1st, and many states' revenue projections are already looking overly optimistic (refer to the National Conference of State Legislatures' State Budget Update: June 2008). As a result, a handful of states have taken a proactive approach and have either begun immediate budget cuts or have scheduled special sessions.
- New York – Having identified a $26.2 billion budget deficit over the next three years, Gov. Patterson (D) is convening an "emergency economic session" of the legislature today, August 19th. Gov. Patterson is calling for $1 billion in budget cuts by reducing financing for Medicaid, assistance to municipal governments and the City University of New York, while legislative leaders, however, have only identified $200 million in cuts. Further, the Gov. recently created a Council of Economic Advisors to review the state's budget situation and provide the Gov. with additional recommendations to address the state's fiscal crisis. Click here to view the Council's membership.
- Florida – Now leading the nation in the jobless rate (Miami Herald), paired with the fallout from the subprime mortgage crisis and surging energy prices, the states' tax collections fell approximately $1.8 billion below estimated March projections for FY 2009, according to a report issued by state economists August 15th. Pressure is mounting on Gov. Crist (R) to call a special session to address the growing budget shortfall.
- Georgia – As July tax collections plummeted 6.6% from this time last year, Gov. Perdue (R) ordered across-the-board spending cuts of 6%. The state faces a $1.6 billion budget deficit and there are increasing calls for a special session to consider further budget cuts or raise taxes.
- Virginia – On August 15th, Gov. Kaine (D) called for $32 million in new spending cuts to balance the state's current two-year budget. These cuts are in addition to the $17 million in reductions made to the budget in the last fiscal year that will be carried forward into the current state spending plan. In addition, earlier this year, the Gov. and lawmakers eliminated $1 billion from the original spending plan the Gov. had proposed for fiscal year 2009.
Note: this is not an exhaustive list of states addressing budget shortfalls but rather is representative of the economic trends states are currently encountering.