http://www.nytimes.com/2011/10/20/us/states-warn-that-tax-revenues-arent-rebounding.html?_r=3The warning by the State of Washington’s economist was unusually blunt, a far cry from the kind of dry, green-eyeshade language that often cloaks such announcements: “We are in the fragile aftermath of the Great Recession, where a return to normalcy seems like a mirage in the desert — the closer we get to it, the further it moves away.”
The upshot: Washington’s weaker-than-expected tax collections have led the state to project that it will take in $2 billion less than it expected when its two-year budget took effect in July. Gov. Christine Gregoire, a Democrat, called a special legislative session for next month so the state, which has cut $10 billion in spending since the recession began, can weigh more cuts.
Other large states face similar problems, a clear sign that they are still not out of the woods several years after the housing bubble burst, the recession began and many states made big spending cuts. Florida, California, New York and New Jersey have all seen their tax collections come in below expectations in recent months as the nation has continued to struggle with high joblessness, a weak housing market, a sliding stock market and worries about the European debt crisis. The states are collecting more in taxes than last year, but not as much as they did before the recession began, and not as much as they expected when they drew up their budgets last spring.
State budget experts note that the fiscal year began in most states on July 1, and some remain hopeful that the economy will improve enough over the coming months that more rounds of cuts or tax increases will not be needed. Some states are seeing surpluses. But when budget analysts met last weekend near Washington, D.C., at a meeting of the National Association of State Budget Officers, many spoke of the uncertainty, said Scott D. Pattison, the group’s executive director.
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