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ARE STATE BUDGETS SOUND?

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  • Source:
    State Legislatures. Oct/Nov2005, Vol. 31 Issue 9, p24-24. 1p. 1 Black and White Photograph.
  • Additional Information
    • Subject Terms:
      U.S. state budgets; Public finance; Budget deficits; Taxation; U.S. states
    • Subject Terms:
      United States
    • Abstract:
      The article discusses factors that affect the soundness of state budgets in the U.S. States are required to balance their budgets. In recent years lawmakers closed budget gaps by cutting spending, raising revenues or tapping reserves. Some states even borrowed money. Nearly every state used onetime funds to keep budgets in the black. According to the Center on Budget and Policy Priorities, a state has a structural deficit when the normal growth of revenues under existing tax policy is chronically inadequate to fund the normal growth of expenditures for current services, even at times of healthy economic growth. The center has identified 10 factors that place a state at risk for a structural deficit. Using these factors, the center found that 44 states faced five or more risk factors, with 11 states having nine or 10 risk factors. Most of the risk factors are associated with a state's tax structure.