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Update on State Budget Shortfalls

1 min readBy: Joseph Bishop-Henchman

The National Association of State Budget Officers (NASBO) last month released an update on the state fiscal situation (PDF). Some highlights:

  • All state FY 2010 enacted budgets, added up, are 5.4% lower than the previous year, which itself was a 3.4% decline than the year before that. These are the first declines since 1983.
  • After enactment of FY 2010 state budgets, $108.7 billion in gaps opened, of which $18.9 billion were outstanding. The $89.8 billion in closing was made up of $23.9 billion in increased taxes and fees, $7.7 billion in gimmicky revenue changes (deferring taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. cuts, raiding funds, amnesties), and at least $55.7 billion in reductions in planned spending.
  • Budget gaps estimated for FY 2011 stand at $55.4 billion; for FY 2012, $61.8 billion.
  • 41 states have seen revenue come in lower than they had projected for FY 2010.
  • 24 states have cut their desired spending for FY 2010 by more than 5 percent.
  • In January 2010, state governments eliminated 18,000 jobs.

More on state budgets and taxes here.