Report: fiscal pessimism in state budgets
While state revenues are gradually recovering from the huge decline during and after the Great Recession, they are not growing sufficiently to keep pace with the spending required by Medicaid costs, pensions, and other responsibilities and obligations. That is the conclusion of a report by the State Budget Crisis Task Force. The report, from a group of budget experts, looked at fiscal trends in six large states.
“The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” cautioned the chairmen of the task force, Richard Ravitch, a former lieutenant governor of New York, and Paul A. Volcker, a former chairman of the Federal Reserve.
The analysis said that some states have used gimmicks and nonrecurring revenues in recent years to mask the continuing imbalance between the revenues they take in and the bills and expenses that must be paid. Volatile and eroding tax bases, federal deficit reduction measures and recurring revenue shortfalls in local governments will continue to challenge state governments, according to the report.
Go here to view the full report.