Monday, May 8, 2017

State budgets in stress

States having hard times.  Hill:
State tax revenues grew by a startlingly weak 1.2 percent in the last fiscal year, raising concerns among legislators and economists that states are in for a new round of painful budget cuts.States have collected progressively more tax revenue for six consecutive years since the nadir of the recession, when worsening economic conditions blew big holes in budgets. But the robust growth of 2015, when revenues increased by 4.7 percent, has fallen as corporations report fewer profits and personal income and sales taxes stagnate.Personal income taxes grew by just 0.2 percent over the last year, when adjusted for inflation. Sales taxes grew by just 0.9 percent in the same period.

The growth in revenue is just 1.2%, but the variation in hat number is about 3%. So we can expect many states to be in dire shape, like Illinois and the North East. Then when the small states have big trouble, the senate must stop and bail them out.

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