The U.S. economy may not be in a recession – a subject of ongoing debate – but the financial situations of many states have deteriorated badly.
The National Conference of State Legislators surveyed 50 state fiscal directors and released its report April 25. William Pound, the executive director of the NCSL, stated that some states “have declined so much that they appear to be in a recession.”
The NCSL said that 23 states and Puerto Rico are already reporting budget shortfalls totaling $26 billion for the upcoming fiscal year.
The projections from the Washington, DC-based Center on Budget and Policy Priorities were even worse. The CBPP said that 27 states are reporting projected budget shortfalls next year totaling at least $39 billion.
The weakening economy is hitting tax revenue as the tanking housing market and higher food and fuel costs mean that people are spending less. The situation is particularly grim in Arizona, California, Delaware, New York and Washington.
The NCSL report did note one silver lining. For energy-producing states such as Alaska, North Dakota and Wyoming, “the fiscal situation is strong and the outlook is good.”