States' budget picture is brightening

[Elmore Furth]

Source: LA Times

The good news in a report released Wednesday is that, as the nation's economy slowly starts growing again, state budgets are finally on the mend after taking their worst battering since the Great Depression.

The bad news is that the situation in state capitals is still grim: Even after cutting a combined $84 billion at the start of this fiscal year, 15 states face persistent deficits that must be closed over the next six months. Meanwhile, 35 states project deficits in the next fiscal year, which begins in July 2011.

Although the halting economic expansion has finally caused tax revenue to rise, states are still wrestling with increasing demand for social services as recession-battered families remain desperate for aid. And the $800-billion federal stimulus — which represented about 5% of state budgets last year — is expiring, with nothing to take its place.

"It's a sort of budget paradox," said Arturo Perez, an analyst for the National Conference of State Legislatures, which released Wednesday's report. "Revenues are stabilizing or even growing for the first time in 18 to 24 months. …But they're not growing fast enough to offset that 5% across the board."



Read more: http://www.latimes.com/news/nationworld/nation/la-na-state-budgets-20101208,0,6526135.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fnews%2Fnationworld%2Fnation+%28L.A.+Times+-+National+News%29

[rpannier]

1. It's a start

Hope that it keeps moving in that direction

[No Elephants]

2. Boy, that was fast. Less than a week ago, we had a story on how bad off states were.

What a difference a day makes, indeed.

In another couple of days, will we get another story that the states are in deeper trouble than anyone realized?

That seems to be the typical sequence with these stories about the economy.

[tomm2thumbs]

3. exactly - the information is all being swished back and forth by whim

if anyone thought this economy was going to chirp back to life with the spring, they haven't been paying attention

[ixion]

4. yep... amazing, eh?

The truth is closer to the first draft than this one, in my opinion.