The decline in state finances over the past year has been worse than expected, according to a new report released July 23.
The National Conference of State Legislatures' State Budget Update: June 2008 is based on information collected from legislative fiscal directors in June and early July, and covers the revenue and expenditure situation for all 50 states and Puerto Rico. More states reported gaps for FY09 than for FY08, with the cumulative total more than tripling from about $13 billion to more than $40 billion. Also, states have taken the lead in healthcare reform, with many expanding eligibility for the State Children's Health Insurance Program, and are finding that health care is costing considerably more than they expected.
Fiscal deterioration is not across the board, however; states that have significant portions of their tax bases tied to natural resources seem to have escaped major budget problems, and several of these states report tax collections are much higher than expected. Also, the leisure and hospitality sector is robust in 11 states. Read the press release.
