Friday, July 25, 2008

Majority of States Face Budget Woes

The National Conference of State Legislatures (NCSL) wraps up today in New Orleans. A report on State Budgets, released on Wednesday, reveals that Hawaii is not alone in facing a decline in state revenues for fiscal year 2009, and that the gaps between budgets and expenditure plans range from $13 billion up to over $40 billion. Most states, however, have determined the actions they need to take to balance their budgets. Some bullets:
  • Largest concern seems to be anemic sales tax collections.
  • Not every state faces fiscal challenges. States that tie their tax base to natural resources have escaped major problems.
  • Few states have raised taxes to remedy the problem; most are cutting spending.
  • Four states will reduce the size of state workforce, including not filling vacant positions.
  • Nine states report a hiring freeze.
  • Massachusetts, Minnesota and Nevada report tapping into their rainy day or other state fund.
  • Industry sectors having the greatest negative impact on state budgets were financial services, manufacturing and housing.
  • Industry sectors having the greatest positive impact on state budgets were leisure & hospitality, natural resources and agriculture.

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