What the state give with one hand, it takes away with another

At least part of the Federal stimulus is taken away on a state level in the US..

State budgets are in dire straits, mostly. Rampant cuts that hurt services and people. Ok, the numbers, even in total, are a lot smaller, but the incidence on real spending is way higher, we think. This is because the direct effects of the cuts directly hurt services, incomes, and employment. If you fire a teacher, he or she will make cutbacks in spending, while the Federal stimulus was the result of political compromise and trading favours, it was far from optimally designed (for instance, it has large tax cuts which under the circumstances of balance sheet problems were likely to be mostly saved).

The Pragmatic Capitalist
17 August 2010 by John Mauldin

By Elizabeth McNichol, Phil Oliff and Nicholas Johnson via John Mauldin at Investors Insight:

The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. As a result, even after making very deep spending cuts over the last two years, states continue to face large budget gaps. At least 46 states struggled to close shortfalls when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states). These came on top of the large shortfalls that 48 states faced in fiscal years 2009 and 2010. States will continue to struggle to find the revenue needed to support critical public services for a number of years, threatening hundreds of thousands of jobs. States face:

  • Budget problems in 2011. Fiscal year 2011 gaps — addressed with spending cuts and revenue increases by most states — totaled $121 billion, or 19 percent of budgets in 46 states.[1] This total is likely to grow over the course of the fiscal year, which started July 1 in most states. It may well exceed $140 billion and would be higher still without federal assistance. The fact that the gaps have been filled and budgets are balanced does not end the story. Families hit hard by the recession will experience the loss of vital services throughout the year, and the negative impact on the economy will continue.
  • Uncertainty for the future. States’ fiscal problems will continue in the current fiscal year and likely beyond. Already 39 states have projected gaps that total $102 billion for the following year (fiscal year 2012). Once all states have prepared estimates these are likely to grow to some $120 billion.
  • The effects of gaps in 2010 budgets. These new shortfalls are in addition to the gaps states closed in their fiscal year 2010 budgets. Counting both initial and mid-year shortfalls, 48 states addressed such shortfalls in their budgets for fiscal year 2010, totaling $192 billion or 29 percent of state budgets — the largest gaps on record.
  • 9 8 08sfp rev7 15 10 f1 RECESSION CONTINUES TO BATTER STATE BUDGETS; RESPONSES COULD SLOW RECOVERYDeclining federal assistance. Federal aid to states provided in the American Recovery and Reinvestment Act has lessened state cuts in services and tax increases. But the aid is now mostly gone; only about $40 billion remains to help with 2011 fiscal problems. The federal government could avert deep additional budget cuts that would further harm the economy by extending assistance over the period during which state fiscal distress is expected to continue rather than cutting it off before states have recovered.
  • Combined gaps of $260 billion for 2011 and 2012. These numbers suggest that states are dealing with total budget shortfalls of some $260 billion for 2011 and 2012. When all is said and done, states will have closed shortfalls of more than $500 billion since the start of the recession.

State Budget Shortfalls in 2010, 2011, and 2012

States already have faced and addressed extraordinarily large shortfalls as they developed and implemented spending plans for fiscal years 2009, 2010, and 2011 (which have now ended in most states). Shortfalls are the extent to which states’ revenues, hit hard by the recession, fall short of the cost of providing services. Every state save Vermont has some sort of balanced-budget law. So the shortfalls for 2009 and 2010 and most of the shortfalls for 2011 have already been closed through a combination of spending cuts, withdrawals from reserves, revenue increases, and use of federal stimulus dollars.

9 8 08sfp rev7 20 10 f2 RECESSION CONTINUES TO BATTER STATE BUDGETS; RESPONSES COULD SLOW RECOVERYStates’ fiscal conditions remain extremely weak this year – fiscal year 2011 – even as the economy appears to be moving in the direction of recovery. Indeed, historical experience and current economic projections suggest 2011 will be worse than 2010 by the time the year ends due to declining federal assistance. Taking all these factors into account, it is reasonable to expect that for 2011, shortfalls are likely to exceed $140 billion after taking into account approximately $40 billion in federal Recovery Act dollars that are likely to remain available for fiscal year 2011.[2] Once employment is growing again, state budget problems will diminish but it is likely that states will face shortfalls of at least $120 billion in fiscal 2012. This means that states will close shortfalls of some $260 billion for fiscal years 2011 and 2012 combined. Figure 2 shows the budget shortfalls that states faced and will face after taking into account the federal recovery act dollars.

The recession caused a state fiscal crisis of unprecedented severity. Figure 3 compares the size and duration of the shortfalls that occurred in the recession of the first part of this decade to shortfalls reported to date this time. In the early 2000s, as in the early 1990s and early 1980s, state fiscal problems lasted for several years after the recession ended. The same will undoubtedly be the case this time, since the current recession is more severe — deeper and longer — than the last one, and state fiscal problems have proven to be worse and are likely to remain so.

9 8 08sfp rev7 20 10 f3 RECESSION CONTINUES TO BATTER STATE BUDGETS; RESPONSES COULD SLOW RECOVERYUnemployment, which peaked after the last recession at 6.3 percent, has already hit 10 percent, and many economists expect it to remain at high levels throughout 2010 and beyond. Continued high unemployment will keep state income tax receipts at low levels and increase demand for Medicaid and other essential services that states provide. High unemployment and economic uncertainty, combined with households’ diminished wealth due to fallen property values, will continue to depress consumption, thus sales tax receipts also will remain low. These factors suggest that state budget gaps will continue to be significantly larger than in the last recession, and last longer.

Estimates from the states, although incomplete, are consistent with this outlook. Table 1 lists the shortfalls that states dealt with when adopting budgets for 2011. A total of 46 states addressed shortfalls for fiscal year 2011. This total includes at least 34 of the states that prepare budgets annually and recently addressed deficits for fiscal year 2011. In addition, 11 states that operate on a two-year budget cycle (known as a biennial budget) adopted budgets a year ago that addressed shortfalls for 2011 totaling at least $25 billion. In total, fiscal year 2011 gaps — which have been addressed in most states — total $121 billion or 19 percent of budgets. In addition, at least 39 states have looked ahead to fiscal year 2012 and anticipate shortfalls totaling $102 billion. (See Table 2.) It is reasonable to expect that it will grow during the course of the fiscal year if revenues again come in under expectations or spending reductions yield less savings than anticipated.

Gaps States Have Faced in FY2011
Pre-Budget Adoption Gap in States with Biennial 09-11 Budgets Pre-Budget Adoption Gap in States With Annual Budgets/New Gap in Biennial States Total FY11 Shortfall Closed When Budget Adopted* Total Shortfall as Percent of FY11 Budget
Alabama 0 $586 million $586 million 8.3%
Arizona 0 $3.1 billion $3.1 billion 36.6%
California* 0 $17.9 billion $17.9 billion* 21.6%
Colorado 0 $1.5 billion $1.5 billion 21.6%
Connecticut $4.4 billion $700 million $5.1 billion 28.9%
Delaware 0 $377 million $377 million 11.5%
District of Columbia 0 $104 million $104 million 1.7%
Florida 0 $4.7 billion $4.7 billion 20.2%
Georgia 0 $4.2 billion $4.2 billion 26.2%
Hawaii 0 $594 million $594 million 12.0%
Idaho 0 $84 million $84 million 3.4%
Illinois 0 $13.5 billion $13.5 billion 41.5%
Indiana 0 $1.3 billion $1.3 billion 9.4%
Iowa 0 $1.1 billion $1.1 billion 18.9%
Kansas 0 $510 million $510 million 8.7%
Kentucky 0 $780 million $780 million 8.8%
Louisiana 0 $1.0 billion $1.0 billion 12.5%
Maine $765 million $174 million $940 million 34.7%
Maryland 0 $2.0 billion $2.0 billion 14.4%
Massachusetts 0 $2.7 billion $2.7 billion 9.6%
Michigan* 0 $2.0 billion $2.0 billion* 9.2%
Minnesota $2.8 billion $1.2 billion $4.0 billion 26.0%
Mississippi 0 $716 million $716 million 16.1%
Missouri 0 $730 million $730 million 9.4%
Nebraska $150 million $179 million $329 million 9.6%
Nevada $1.3 billion $504 million $1.8 billion 54.0%
New Hampshire $250 million $115 million $365 million 24.1%
New Jersey 0 $10.7 billion $10.7 billion 38.3%
New Mexico 0 $333 million $333 million 6.2%
New York* 0 $8.5 billion $8.5 billion* 15.9%
North Carolina $4.4 billion $1.4 billion $5.8 billion 30.3%
Ohio $2.5 billion $463 million $3.0 billion 11.3%
Oklahoma 0 $725 million $725 million 14.8%
Oregon* Yes $577 million See Table 2 See Table 2
Pennsylvania 0 $4.1 billion $4.1 billion 15.6%
Rhode Island 0 $395 million $395 million 13.9%
South Carolina 0 $1.3 billion $1.3 billion 25.6%
South Dakota 0 $102 million $102 million 8.8%
Tennessee 0 $1.0 billion $1.0 billion 9.8%
Texas $3.3 billion $1.3 billion $4.6 billion 10.2%
Utah 0 $700 million $700 million 14.6%
Vermont 0 $338 million $338 million 30.2%
Virginia 0 $1.3 billion $1.3 billion 8.8%
Washington* $2.1 billion Yes* $2.1 billion 12.9%
West Virginia 0 $134 million $134 million 3.6%
Wisconsin $3.4 billion 0 $3.4 billion 23.9%
Wyoming 0 $147 million $147 million 10.3%
States Total $25.3 billion $95.9 billion $121.2 billion 18.7%
Note: California, New York, and Michigan have not completed their FY11 budgets so these gaps remain open. California’s shortfall does not include $1.2 billion in proposed reserve replenishment. Oregon and Washington have two-year budgets. See Table 3 for additional gap information

These current year shortfalls are in addition to the gaps states closed when adopting their fiscal year 2010 budgets and the mid-year gaps that developed after these budgets were adopted. Table 3 combines the mid-year gaps with the gaps that were addressed when states wrote their 2010 budgets. In total, 48 states have addressed shortfalls in their budgets for fiscal year 2010, totaling $192 billion or 29 percent of state budgets — the largest gaps on record. (Table 4 of this paper shows the 2009 budget gaps that were addressed, and Table 5 lists the sources of these shortfall estimates for each state.)

States with Projected FY2012 Gaps
FY12 Projected Shortfall Shortfall as Percent of FY11 Budget
Arizona $863 million 10.2%
California $21.3 billion 25.7%
Colorado $954 million 13.4%
Connecticut $3.8 billion 21.6%
Florida $2.3 billion 10.0%
Georgia $1.7 billion 10.6%
Hawaii Yes, DK size na
Idaho $182 million 7.4%
Illinois $17.0 billion 52.3%
Iowa $800 million 14.1%
Kansas $217 million 3.7%
Kentucky $780 million 8.8%
Louisiana $1.7 billion 21.2%
Maryland $1.5 billion 11.1%
Massachusetts $2.0 billion 7.1%
Michigan $1.4 billion 6.4%
Minnesota $3.8 billion 25.0%
Mississippi $1.2 billion 27.6%
Missouri $982 million 12.6%
Montana $169 million 9.2%
Nebraska $147 million 4.3%
Nevada $1.3 billion 36.7%
New Jersey Yes, DK size na
New Mexico $236 million 4.4%
New York $14.6 billion 27.3%
North Carolina $3.0 billion 15.7%
Ohio $3.0 billion 11.3%
Oklahoma Yes, DK size na
Oregon $2.5 billion 17.6%
Pennsylvania $2.4 billion 9.3%
Rhode Island $330 million 11.6%
South Carolina $1.3 billion 26.1%
Tennessee $374 million 3.7%
Texas $5.4 billion 12.0%
Vermont $122 million 10.9%
Virginia $2.3 billion 15.4%
Washington $1.2 billion 7.2%
West Virginia $155 million 4.2%
Wisconsin $1.2 billion 8.7%
States Total $102.3 billion 17.7%

Of course, a faster-than-expected recovery could reduce the size of future shortfalls. But several factors could make it particularly difficult for states to recover from the current fiscal situation. Housing markets might be slow to fully recover; their decline already has depressed consumption and sales tax revenue as people refrain from buying furniture, appliances, construction materials, and the like. This also would depress property tax revenues, increasing the likelihood that local governments will look to states to help address the squeeze on local and education budgets. And as the employment situation continues to be weak, income tax revenues will continue to lag and there will be further downward pressure on sales tax revenues as consumers are reluctant or unable to spend.

Some states have not been affected by the economic downturn, but the number is dwindling. Mineral-rich states — such as New Mexico, Alaska, and Montana — saw revenue growth in the beginning of the recession as a result of high oil prices. More recently, however, the decline in oil prices has affected revenues in these states. The economies of a handful of other states have so far been less affected by the national economic problems. Only two states, Montana and North Dakota, have not reported budget shortfalls, but the recession has dampened those states’ surpluses, which were largely mineral-driven as well. Two other states – Alaska and Arkansas – faced shortfalls in fiscal year 2010 but are not now projecting gaps for fiscal year 2011.

The Consequences of Shortfalls

In states facing budget gaps, the consequences are severe in many cases — for residents as well as the economy. To date, budget difficulties have led at least 45 states to reduce services to their residents, including some of their most vulnerable families and individuals.[3] Over 30 states have raised taxes to at least some degree, in some cases quite significantly.

If revenue declines persist as expected in many states, additional spending and service cuts are likely. Budget cuts often are more severe later in a state fiscal crisis, after largely depleted reserves are no longer an option for closing deficits.

Spending cuts are problematic policies during an economic downturn because they reduce overall demand and can make the downturn deeper. When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals. In all of these circumstances, the companies and organizations that would have received government payments have less money to spend on salaries and supplies, and individuals who would have received salaries or benefits have less money for consumption. This directly removes demand from the economy.

Tax increases also remove demand from the economy by reducing the amount of money people have to spend — though to the extent these increases are on upper-income residents, that effect is minimized because much of the money comes from savings and so does not diminish economic activity. At the state level, a balanced approach to closing deficits — raising taxes along with enacting budget cuts — is needed to close state budget gaps in order to maintain important services while minimizing harmful effects on the economy.

The Role of Federal Assistance

Federal assistance is lessening the extent to which states need to take pro-cyclical actions that further harm the economy. The American Recovery and Reinvestment Act enacted in February 2009 includes substantial assistance for states. The amount in ARRA to help states maintain current activities is about $135 billion to $140 billion over a roughly 2 ½-year period — or between 30 percent and 40 percent of projected state shortfalls. Most of this money is in the form of increased Medicaid funding and a “State Fiscal Stabilization Fund.” (There are also other streams of funding in the economic recovery act flowing through states to local governments or individuals, but these will not address state budget shortfalls.) This money has reduced the extent of state spending cuts and state tax and fee increases.

But it now appears likely the federal assistance will end before state budget gaps have abated. The Medicaid funds are scheduled to expire in December 2010, which is just halfway through the 2011 fiscal year in most states.[4] States will have drawn down most of their State Fiscal Stabilization Fund allocations by then as well. So even though the 2011 budget gaps may well be larger than those for 2010, there will be less federal money available to close them. States are likely to respond with spending cuts and tax increases even larger than those that have already been enacted.

Such measures in most states will take effect with the 2011 fiscal year — that is, in July 2010, thereby reducing aggregate demand and weakening the economy at a critical moment in its recovery. If states get no further federal assistance, the steps they will have to take to eliminate deficits will likely take a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year. [5]

A possibility would be for the federal government to reduce state budget gaps — and hence avert some spending cuts and/or tax increases — by extending the Medicaid funds over the period during which state fiscal conditions are expected to still be problematic, rather than cutting them off in December 2010. The federal government could also provide additional assistance to states for education through the State Fiscal Stabilization Fund. Ideally, such action would occur very soon, so that it can be factored into states’ budget decisions for fiscal year 2011. (Most states are balancing their budgets on the assumption that the Medicaid funding will be extended, but are not assuming additional education funds. If the federal government fails to extend this aid, many states will be forced to reopen their 2011 budgets to make even deeper spending cuts and more tax increases than previously planned.)

Total FY2010 Budget Gaps
FY2010 Before Budget Adoption Additional FY2010 Mid-Year Gap FY2010 Total Total Gap as Percent of % of FY2010 General Fund
Alabama $1.2 billion $400 million $1.6 billion 23.7%
Alaska $1.3 billion 0 $1.3 billion 28.9%
Arizona $3.2 billion $1.9 billion $5.1 billion 65.0%
Arkansas $146 million $247 million $395 million 9.1%
California* $45.5 billion Yes* $45.5 billion 52.8%
Colorado $1.0 billion $600 million $1.6 billion 23.8%
Connecticut $4.2 billion $513 million $4.7 billion 27.0%
Delaware $557 million 0 $557 million 18.2%
District of Columbia $650 million $167 million $817 million 13.0%
Florida $5.9 billion $147 million $6.0 billion 28.5%
Georgia $3.1 billion $1.4 billion $4.5 billion 28.8%
Hawaii $682 million $533 million $1.2 billion 25.2%
Idaho $411 million $151 million $562 million 22.4%
Illinois $9.3 billion $5.0 billion $14.3 billion 43.7%
Indiana $1.1 billion $309 million $1.4 billion 10.6%
Iowa $779 million $533 million $1.3 billion 22.6%
Kansas $1.4 billion $459 million $1.8 billion 33.9%
Kentucky 0 $1.2 billion $1.2 billion 14.5%
Louisiana $1.8 billion $777 million $2.5 billion 27.8%
Maine $640 million $209 million $849 million 28.0%
Maryland $1.9 billion $936 million $2.8 billion 20.3%
Massachusetts $5.0 billion $600 million $5.6 billion 20.4%
Michigan $2.8 billion $454 million $3.3 billion 15.8%
Minnesota $3.2 billion $209 million $3.4 billion 22.7%
Mississippi $480 million $437 million $917 million 19.3%
Missouri $780 million $931 million $1.7 billion 22.7%
Nebraska $150 million $155 million $305 million 9.2%
Nevada $1.2 billion $384 million $1.5 billion 46.8%
New Hampshire $250 million $180 million $430 million 28.6%
New Jersey $8.8 billion $2.2 billion $11 billion 40.0%
New Mexico $345 million $650 million $995 million 18.2%
New York $17.9 billion $3.2 billion $21.0 billion 38.8%
North Carolina $4.6 billion $391 million $5.0 billion 26.2%
Ohio $3.3 billion $296 million $3.6 billion 13.9%
Oklahoma $777 million $864 million $1.6 billion 28.4%
Oregon* $4.2 billion 0 $4.2 billion 32.4%
Pennsylvania $4.8 billion $1.1 billion $5.9 billion 23.6%
Rhode Island $590 million $400 million $990 million 34.8%
South Carolina $725 million $439 million $1.2 billion 21.5%
South Dakota $32 million 15.8 million $48 million 4.3%
Tennessee $1.0 billion $170 million $1.2 billion 12.1%
Texas $3.5 billion 0 $3.5 billion 10.7%
Utah $721 million $279 million $1.0 billion 22.1%
Vermont $278 million $28 million $306 million 28.3%
Virginia $1.8 billion $1.8 billion $3.6 billion 24.1%
Washington* $3.4 billion $2.8 billion $6.2 billion 27.9%
West Virginia $184 million $120 million $304 million 8.2%
Wisconsin $3.2 billion 0 $3.2 billion 23.7%
Wyoming 0 $32 million $32 million 1.8%
Total $158.5 billion $33.7 billion $192.2 billion 29.2%
Notes: * California’s mid-year gap is included in the total shown for FY11 in Table 1. Oregon and Washington have two-year budgets. For Oregon, the size of the combined shortfall before budget adoption for FY10 and FY11 is shown here. For Washington, the mid-year gap shown is the projected gap for the two years ending in FY11.
Total FY2009 Budget Gaps
Gap Before Budget Was Adopted Additional Mid-Year Gap Total Total Gap as Percent of FY2009
General Fund
Alabama $1.1 billion $1.1 billion 12.7%
Alaska $360 million $360 million 6.8%
Arizona1 $1.9 billion $1.8 billion $3.7 billion 36.8%
Arkansas $107 million $107 million 2.4%
California $22.2 billion $14.9 billion $37.1 billion 36.7%
Colorado $1.1 billion $1.1 billion 14.2%
Connecticut $150 million $2.5 billion $2.7 billion 15.5%
Delaware $217 million $226 million $443 million 12.2%
District of Columbia $96 million $583 million $679 million 10.8%
Florida $3.4 billion $2.3 billion $5.7 billion 22.2%
Georgia1 $245 million $2.2 billion $2.4 billion 11.5%
Hawaii $417 million $417 million 7.3%
Idaho $452 million $452 million 15.3%
Illinois $1.8 billion $2.5 billion $4.3 billion 15.1%
Indiana $1.2 billion $1.2 billion 9.1%
Iowa $350 million $134 million $484 million 7.6%
Kansas $186 million $186 million 2.9%
Kentucky $266 million $456 million $722 million 7.8%
Louisiana $341 million $341 million 3.7%
Maine $124 million $140 million $265 million 8.6%
Maryland $808 million $691 million $1.5 billion 10.0%
Massachusetts $1.2 billion $4.0 billion $5.2 billion 18.5%
Michigan $472 million $1.5 billion $2.0 billion 8.5%
Minnesota $935 million $654 million $ 1.6 billion 9.2%
Mississippi1 $90 million $363 million $453 million 8.9%
Missouri $542 million $542 million 6.0%
Nevada $898 million $561 million $1.6 billion 19.9%
New Hampshire $200 million $50 million $250 million 8.0%
New Jersey1 $2.5 billion $3.6 billion $6.1 billion 18.8%
New Mexico $454 million $454 million 7.5%
New York $4.9 billion $2.5 billion $7.4 billion 13.2%
North Carolina $3.2 billion $3.2 billion 14.9%
Ohio1 $733 million $1.9 billion $2.6 billion 9.4%
Oklahoma $114 million $114 million 1.7%
Oregon $442 million $442 million 6.6%
Pennsylvania $3.2 billion $3.2 billion 11.3%
Rhode Island $430 million $442 million $872 million 26.6%
South Carolina $250 million $871 million $1.1 billion 16.3%
South Dakota $27 million $27 million 2.2%
Tennessee1 $468 million $1.0 billion $1.5 billion 13.4%
Utah $620 million $620 million 10.4%
Vermont $59 million $82 million $141 million 11.6%
Virginia $1.2 billion $1.1 billion $2.3 billion 13.8%
Washington $1.3 billion $1.3 billion 8.5%
Wisconsin $652 million $1.0 billion $1.7 billion 11.7%
Wyoming $119 million $119 million 6.8%
TOTAL $46.8 billion $63.1 billion $109.9 billion 15.2%
1 These states provided a range of estimates for their FY09 gaps; this table shows only the low end of the estimates. For more detail see 29 States Faced Total Budget Shortfall of At Least $48 billion in 2009 available at http://www.cbpp.org/1-15-08sfp.htm. Note: In most cases these shortfalls have already been addressed.
Source of Gap Estimates
Alabama Governor’s Office/ Arise Policy Project
Alaska Legislative Fiscal Office/Legislative Finance Division Overview of proposed budget
Arizona Joint Legislative Budget Committee, Financial Advisory Committee
Arkansas Governor’s proposed budget, Dept of Finance and Administration
California Governor’s budget, Legislative Analysts Office, Dept of Finance, Controller
Colorado Colorado Fiscal Policy Institute/CO Legislative Council
Connecticut CT Voices for Children analysis of Office of Fiscal Analysis data/ Comptroller
Delaware Governor’s proposed budget
District of Columbia Chief Financial Officer
Florida Revenue Estimating Conference
Georgia State budget, Georgia State University/ FY11: Georgia Budget and Policy Institute
Hawaii Council on Revenues forecast/Governor’s Office
Idaho Legislative summary of adopted budget/Governor’s budget office
Illinois State budget/Voices for Illinois Children analysis
Indiana State Budget Committee
Iowa Fiscal Services Division/Revenue Estimating Conference
Kansas State Budget and Legislative Research Department
Kentucky Consensus Forecasting Group/Governor’s office
Louisiana Revenue Estimating Conference/Governor’s budget
Maine Revenue Forecasting Committee/Office of Fiscal and Program Review
Maryland Department of Legislative Services/ State Board of Rev Estimates
Massachusetts FY12 Governor’s Budget/ FY11 MA Budget & Policy Center
Michigan Consensus Revenue Forecast, Senate Fiscal Agency
Minnesota Management and Budget forecast
Missouri Governor’s budget office and Missouri Budget Project
Mississippi Governor’s office
Montana Montana Budget & Policy Center analysis of Leg. Fiscal Div. Budget Outlook
Nebraska Governor’s office/Tax Rate Review Committee/General Funds Financial Status
Nevada Division of Budget and Planning/Board of Examiners and Jan Economic Forum FY12 press reports
New Hampshire Budget Director/Press reports of revenue shortfalls, court case
New Jersey Governor’s office/ FY12 Treasurer
New Mexico Consensus Revenue Estimate/NM Voices for Children/Leg Finance Committee
New York Division of Budget
North Carolina North Carolina Fiscal Research Division/ FY12 NC Budget and Tax Center
Ohio Office of Budget and Management/ FY12 Community Solutions
Oklahoma State Tax Commission/OK Policy Institute/ FY12 Fiscal Services Division
Oregon Jt. Committee on Ways & Means/May Revenue Forecast/ FY12 OR Reset Report
Pennsylvania Governor’s office/ Budget Director
Rhode Island Governor’s budget/FY12 Poverty Institute
South Carolina State Budget and Control Board and revised revenue projections
South Dakota Governor’s proposed budget
Tennessee Press reports of State Funding Board meeting
Texas Center on Public Policy Priorities analysis of Legislative Budget Board, Comptroller and HHS Commission data.
Utah Governor’s proposed budget, Legislative Fiscal Analyst, press reports
Vermont State budget office /Public Assets Institute analysis of Joint Fiscal Office data
Virginia House Appropriations/Governor’s office
Washington Governor’s Budget/WA Budget and Policy Center/FY12 OFM Six Year Outlook
West Virginia Department of Revenue/Governor’s budget/FY12 Budget Director (press)
Wisconsin Legislative Fiscal Bureau
Wyoming Consensus Revenue Estimating Group
For source information for the original shortfall estimates, see29 States Faced Total Budget Shortfall of At Least $48 billion in 2009 available at http://www.cbpp.org/1-15-08sfp.htm.

End Notes:

[1] Only three states have not yet adopted fiscal year 2011 budgets – Michigan (with a fiscal year that begins October 1) and California and New York.

[2] In general, the projected budget shortfalls reflect state fiscal conditions before deficit-closing actions are taken. States are using a combination of actions to close the deficits including use of federal stimulus funds, budget cuts, tax increases, and reserves. (For FY2011, however, some states projected the size of the deficit after use of federal stimulus funds. This would be reflected in the $121 billion in shortfalls reported to date for FY2011. The estimated total of $180 billion reflects the projected deficit before use of federal stimulus funds.)

[3] For more detailed information, see “An Update on State Budget Cuts.”

[4] Most states operate on a July-June fiscal year; the exceptions are New York (April-May), Texas (September-August), and Alabama and Michigan (October-September).

[5] For more information on this analysis see: Iris J. Lav, Nicholas Johnson and Elizabeth McNichol, “ Additional Federal Fiscal Relief Needed to Help States Address Recession’s Impact,” Center on Budget and Policy Priorities .


John Mauldin is president of Millennium Wave Advisors, LLC, a registered investment advisor. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors before making any investment decisions.

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