Many states appear to be in recession as deficits grow

Posted by Kendall Harmon

The finances of many states have deteriorated so badly that they appear to be in a recession, regardless of whether that's true for the nation as a whole, a survey of all 50 state fiscal directors concludes.
The situation looks even worse for the fiscal year that begins July 1 in most states.

"Whether or not the national economy is in recession—a subject of ongoing debate—is almost beside the point for some states," said the report to be released Friday by the National Conference of State Legislatures.

The weakening economy is hitting tax revenue in a number of ways: People's discretionary income is being gobbled up by higher food and fuel costs, while the tanking housing market means people are spending less on furniture and appliances associated with buying a house.

The situation is grim in Delaware, with a $69 million gap this year, and bleak in California, with a projected $16 billion budget shortfall over the next two years, the report said. Florida does not expect a rapid turnaround in revenue because of the prolonged real estate slump there.

Read it all.

Filed under: * Economics, PoliticsEconomy

Posted April 26, 2008 at 10:08 am [Printer Friendly] [Print w/ comments]

1. DonGander wrote:

The only solution is more taxes.

1Ki 12:14 And spake to them after the counsel of the young men, saying, My father made your yoke heavy, and I will add to your yoke: my father [also] chastised you with whips, but I will chastise you with scorpions. 

Some things never change.


April 26, 10:17 am | [comment link]
2. Br. Michael wrote:

As Mark Twain once said:  “Government is like a baby.  It has a large appitite at one end and irresponsibility at the other.”

April 26, 10:55 am | [comment link]
3. John316 wrote:

Oil and Gas producing states should be doing pretty well.

April 26, 1:14 pm | [comment link]
4. John Wilkins wrote:

Re #2.  Perhaps then, lets close the public schools, fire the firefighters and police, and get rid of the judges. 

Or perhaps you are talking about the military.  Which can’t seem to find $1 Trillion dollars.

April 27, 1:10 am | [comment link]
5. Juandeveras wrote:

Calif.‘s legislature is run and controlled by liberal democrats. Which other “deficit” states are run by democrats, who never seem capable of learning the concept of raising revenue by lowering taxes ?

April 27, 4:31 am | [comment link]
6. Bill Matz wrote:

A CA magazine just reported an interesting related point; 5,000 of the top 25,000 taxpayers in CA have left the state over the last several years. CA’ s tax burden is 2d highest in the nation. The 5,000 taxpayers would have paid $8 billion of that deficit. Yes, let’s raise taxes to be the highest state, and see if we can drive more taxpayers away.

April 28, 1:47 am | [comment link]
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