States face $97 billion budget gap in next two years
Having just closed a $40 billion gap in the fiscal year (FY) 2009 budget, states’ may see that financial crevasse grow by another $97 billion over the next 18 to 24 months, according to a survey by the Washington-based National Conference of State Legislatures (NCSL). Shrinking revenue from sales, personal and corporate income tax is to blame.
“State Budget Update: November 2008,” found that states already face a $32 billion gap between revenue and expenses, and that number is expected to grow by $65 billion in the next fiscal year, which begins on July 1 for most states. “These budget gaps are approaching those seen in the last recession, which were the worst since World War II, and show every sign of growing larger,” said NCSL Executive Director William Pound in a statement.
The survey found that officials in 15 states expect double-digit gaps in their FY2010 budgets, with the largest being in Arizona (24.2 percent), New York (20 percent), California (18 percent), Wisconsin (17.2 percent), Minnesota (14.7 percent) and Kansas (14.5 percent). Arizona, California, New York, Florida and Nevada are experiencing the most acute drop in tax revenue.
Order the report on NCSL’s Web site.