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NC’s budget gap growing; national think tank calls for more federal aid to states

Yesterday in his comments at the Budget & Tax Center’s legislative briefing in Fayetteville, Senator Rand said that the he has been told by legislative fiscal staff that state tax revenues are behind projections by $90 million through the end of October. In the grand scheme of things that is not too much money. What is troubling about this is that the state’s revenue forecast assumes that the worst months would be at the beginning of the fiscal year and after that things would begin to head slowly upward. Moreover, the budget for fiscal year 2010-11 assumes that revenues will grow at a rate of 2.8%. If revenues continue to fall behind the forecast the Governor will be forced to take painful mid-year actions to address this year’s gap and the General Assembly will be forced to make another round of budget cuts sooner rather than later.

On a related note, the Center on Budget and Policy Priorities, just released a new report that looks at how states around the country are faring. It turns out they are not faring well at all and state budget gaps are a major drag on the fragile economic recovery. In addition to assessing the fiscal state of the states, CBPP’s report looks at why the federal government should consider another round of aid to state and local governments to mitigate the drag that state budget gaps are having on the economy and to prevent more harmful budget cuts.

5 Comments

  1. […] Read her post here. […]

  2. IBXer

    November 12, 2009 at 10:58 am

    Don’t count on it. Congress is in the process of working on a healthcare bill that will shift tremendous new costs to states so they can try to pretend the new entitlements will “save” money.

  3. […] Yesterday in his comments at the Budget & Tax Center’s legislative briefing in Fayetteville, Senator Rand said that the he has been told by legislative fiscal staff that state taxrevenues are behind projections by $90 million through the end of …Read Original Story: nc's budget gap growing; national think tank calls for more federal aid to … […]

  4. Jeff

    November 12, 2009 at 1:19 pm

    I thought we were having a jobless recovery.

  5. IBXer

    November 13, 2009 at 11:07 am

    Yeah, I thought all of this government spending was going to result in growth and surpluses and prove Keynes was right…