Slowing Economy Forces States to Trim Budgets.
Position | Brief Article |
The slowing economy has sharply reduced state tax revenues in the last few weeks, forcing a growing number of states around the South and Midwest to cut their budgets for the first time in a decade. As many as 15 states that depend on sales and manufacturing taxes are suddenly facing spending cuts of up to 15 percent. Coming at the same time as a steep increase in Medicaid costs, the budget reversals mean that the days of bold new programs and tax cuts are over in many states. Circumstances differ in each state, but for the most part the reductions are caused by lower-than-expected sales tax revenue in December and January, reflecting reduced holiday spending by consumers. What is most remarkable about the turnaround is...
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