State finances in recession

[Ronstar]

general News - Many states appear to be in recession as deficits grow

[ziggy29]

It's amazing how much difference there can be based on regional economic conditions and fiscal policy.

Here in Texas, there's a surplus of almost $10 billion. Now I expect that to erode as conditions deteriorate, but it's a good start in order to weather what could be ahead.

The economy has been strong enough here that the state has suspended collection of unemployment insurance premiums/taxes from employers because the fund is very sound at the moment. Again, if unemployment ticks up some it might have to be restored, but for the time being, I guess the state figures it's a nice enticement to employers looking to relocate or expand.

[maddythebeagle]

Wisconsin has had a perpetual budget problem since the last recession and slowly worked the problem out (err..shuffled it to the next 2 year budget or has taken money from other programs)....so 20-500 million does not look too bad when it started at 2-3 billion...

[sarahsays]

DC has a huge ongoing budget problem that wasn't helped by a huge tax scam by gov workers.
DC Tax Scam Could Total $31 Million

[al_bundy]

a lot of states go on a spending spree in good times and when things go bad people start to wonder what happened

[Khan]

Quote:

Originally Posted by al_bundy a lot of states go on a spending spree in good times and when things go bad people start to wonder what happened

And if a state does run a surplus and wants to save 'for a rainy day', people start screaming for immediate tax reductions.

[ziggy29]

Quote:

Originally Posted by Khan And if a state does run a surplus and wants to save 'for a rainy day', people start screaming for immediate tax reductions.

Yes, this is a common rant of mine. I lived in California for most of my life, and in the mid-90s we had a couple of rather large surpluses and every special interest under the sun was asking for the surplus. Whether it was people wanting increased funding for their pet programs or people wanting it back in the form of tax rebates, everyone had their hand out. There is no lobby for "save it for a rainy day."

But in reality, failure to save a surplus in good times means that when the cycle turns and you have an operating deficit, you have to raise taxes or cut spending into a rotten economy -- the worst time possible to raise taxes or cut services.

Unfortunately, people with their hands out saying "gimme gimme" are too short-sighted to see that. I'll bet they wish the state still had that surplus money now.