Tag archive for state budgets

More towering proposals…

Yesterday I noted that the State Budget Crisis Task Force–chaired by Paul Volcker and Richard Ravitch–had called for revisiting the Tower Amendment, which prohibits the Securities and Exchange Commission from directly regulating states and cities in the municipal bond market. A recent survey of muni analysts suggests why…

Holiday sales slump threatens state budgets

sad-puppy-santa-1350x1350The mediocre start to the holiday shopping season isn’t just bad news for retailers. It’s likely to add more pressure to state budgets, too, because states rely on robust sales tax receipts from holiday shopping to bolster their budgets. Given that income tax collections are also expected to be soft in the beginning of next year because so many investors took capital gains at the end of 2012 to take advantage of favorable tax laws, states are heading for a continued budget squeeze if Christmas retailing turns out to be a disappointment…

States face new revenue squeeze

Like the federal government, states saw tax revenues spike last year thanks to taxpayers taking income in 2012 to avoid federal tax increases in 2013. But the one-time gain from taxpayers taking capital gains early is likely to steal income, and hence tax revenue, from …

The Red States and the Nordic countries

Most people probably think of America’s Red
States–where people cling to their guns and religion and clamor for lower
taxes–and the Nordic countries–the pacific, secular home of social democracy where
people assemble their own furniture and listen to Abba–as antithetical. But there are some interesting connections…

Scoring the fiscal cliff deal for state and local governments

Going into the fiscal cliff negotiations, state and local governments had two major concerns: the sequestration cuts mandated by the 2011 Budget Control Act, and the fate of certain tax expenditures, such as for municipal bond interest and state and local taxes paid. Sequestration was delayed and tax exemptions were mostly untouched (excepting the reinstatement of the so-called Pease and PEP limits for high-earners). Thus state and local governments are today quite relieved.

RI pension case goes to court

Perhaps the most closely watched lawsuit challenging state pension changes gets its day in court today, as the state of Rhode Island seeks to have a judge dismiss the suit by government unions, who claim the pension changes are unconstitutional. The importance of this case …

The fiscal cliff and the states: unimpressed

Last week, the Pew Center on the States published the most precise account yet of how hard hit state revenues would be by the fiscal cliff’s sequestration cuts. Relying on data from the Federal Funds Information Service, Pew found that 82% of all federal grant revenues …

Who’s afraid of the fiscal cliff?

Some have claimed that the fiscal cliff threatens doom for state and local governments-are they right?  
Well, there would be cuts, but let’s maintain perspective. There are some important mitigating factors to consider. 
State and local governments’ most direct exposure to the fiscal cliff is through the spending cuts portion known as “sequestration.” Sequestration dates back to the summer of 2011′s debt ceiling deal and would total $984 billion in cuts over nine years, split evenly between defense and non-defense programs. The non-defense cuts affect some Federal grants-in-aid programs to state and local governments.

State tax collections slowing again

More bad news for state and local budgets. The Rockefeller Institute is reporting that the rate of growth of state and local tax collections slowed in the second quarter of 2012, even as revenues from these taxes remain below the peak year of 2008.
state tax collections, 2012.jpg

California: Anatomy of an exploding government obligation

Troy Senik notes below a new report which determines that California’s debt is much larger than previously thought. The analysis includes a look at rising state debt from not properly funding  retirement promises to workers. Many readers have become familiar with the way in which politicians have used defined benefit pensions to promise workers retirement perks but not adequately fund them right now. The same process is taking place with promises of health care for life for government workers, because the temptation to underfund these is just as powerful. California illustrates the problem