The Free Press, Mankato, MN

State, national news

April 23, 2014

Lawmakers jockey over budget surpluses

(Continued)

In Kansas, where large tax cuts have been blamed for revenue shortfalls, the situation is a “good news, bad news” picture. State budget officials estimate the state will collect $178 million more than projected in taxes through June 2015, but revenues will still fall 6 percent below the $6.3 billion projected this year.

According to NASBO, Kentucky and many other states have put the emphasis on restoring funding to education this year. A still-incomplete survey of states, many of which have not completed their legislative sessions, showed that the vast majority are increasing elementary and secondary education funding, along with transportation and infrastructure, according to Brian Sigritz, director of state fiscal studies at NASBO.

In addition, the states are looking at “any kind of program that can be tied to economic development and job creation,” Sigritz said.

A NASBO survey of governors this year showed that most were proposing spending growth of 1 percent to 5 percent.

“Overall the governors and legislatures are kind of operating in a cautious manner,” Sigritz said. “The fiscal downturn wasn’t too long ago, so it’s still fresh in their minds.” Moreover, though revenues are increasing in most states, many still aren’t collecting as much money as they were before the Great Recession.

An analysis by The Pew Charitable Trusts (which funds Stateline) found that, after adjusting for inflation, total tax revenue for the 50 states combined finally recovered in mid-2013 from its plunge in the recession. But the recovery varied widely. Only 20 states were back to their peak levels by the second quarter of 2013.

According to data from the Census Bureau, state tax revenue has continued to rebound, showing growth for 16 straight quarters through the end of 2013, which is midway through the fiscal year in most states. Tax revenue in each quarter was higher than the same quarter of the previous year.

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