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Public Policy

July 1 - State Budget Day

Ian Scott on Thursday, July 1, 2010 at 3:32:12 pm

For 46 states July 1 is budget day.  Last year, at least 6 states missed their budget deadlines and others passes temporary fixes.  Despite equally daunting revenue challenges, budget battles have been less protracted this year.  Here's how the Stateline.org blog described it:

"With the notable exceptions of California, which adjourned without a budget on Monday, and New York, which is already three months overdue for a budget, state lawmakers elsewhere are finding more common ground this year. That could be because it's an election year and restless voters may not be in the mood for politics as usual."
Click to read more about state budget battles from Stateline.org

Even Pennsylvania adopted its annual budget on time, a landmark event considering it hasn't been done since Gov. Rendell took office in 2003.  Gene Barr, VP of Government Relations at the Pennsylvania Chamber of Business and industry acknowledged the tough choices and ongoing challenges with the state budget:

"The Commonwealth faces some sobering fiscal challenges, many which still require attention," PA Chamber Vice President Gene Barr said. "Our members recognize the difficult decisions elected officials needed to make in crafting this budget. Facing repeated cries from some groups to spend more an raise taxes, it's reassuring that a majority of lawmakers knew that placing that burden on the backs of business at a time when economic concerns persist and job creation remain sluggish would only make things worse." 
Click to read more from NorthcentralPA.com.

Pennsylvania is hardly alone in having to make tough budget decisions.  With economic growth sluggish at best, nearly every state has faced a drastic decline in tax revenue for the past 2 fiscal years.  The Recovery Act has helped plug some budget holes, but most of that funding will expire this year.  In their Spring 2010 Fiscal Survey of the States, the National Association of State Budget Officers predicted that "spending and revenue is unlikely to return to pre-recession levels until fiscal 2012 or later."

For now, state budget challenges remain one of the most immediately pressing issues for businesses across the country.  Many chambers, like the Kentucky Chamber of Commerce, are tackling the big, structural budget challenges like pension liability, corrections spending, and medicaid.  Stay tuned to the ACCE Policy Clearinghouse Blog for more.

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