States: trouble ahead | Arkansas Blog

Tuesday, February 23, 2010

States: trouble ahead

Posted By on Tue, Feb 23, 2010 at 6:31 AM

State revenues nationwide have declined for 5 consecutive quarters and, according to this story, the outlook isn't bright for improvement. It gives me further pause about Arkansas's budgeted increase, however modest, in general revenue spending in the year ahead.

The revenue decline comes despite the tax increases imposed by many states since the recession began. With less tax money coming into state treasuries and expenses for programs like Medicaid continuing to mount, many states will probably be forced to consider further tax increases, spending cuts and layoffs — actions that some economists warn could put a drag on the nation’s fragile economic recovery.

The Rockefeller Institute report, which was written by Lucy Dadayan, a senior policy analyst, warns, “State tax revenue will continue to be insufficient to support current spending commitments, and more spending cuts and tax increases are most likely on the way for many states.”

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