New Reports on States' Finances Spell Deep Trouble
The recession has cut so deep that state governments will suffer for at least 10 years — or what the National Governors Association bluntly calls “the Lost Decade.” That was among the conclusions in a trio of reports this week that should raise eyebrows over just how bad states' finances have become.
"The bottom line is that states will not fully recover from this recession until late in the next decade,” Raymond C. Sheppach, executive director of the governors' association, said in a statement accompanying a report the group issued Thursday (Nov. 12) with the National Association of State Budget Officers.
The two groups' report (PDF) — a preliminary study that precedes a full report to be released next month — found that, for the first time on record, states' overall spending has declined in back-to-back years, shrinking 4.8 percent last fiscal year and at least 4 percent in the current fiscal year. The unprecedented spending drop is a reflection of sharp declines in state tax collections — including a 7.5-percent plunge last fiscal year — “from every revenue source.”
Read the full report Weekly Wrap: Reports Spell Deep Trouble on Stateline.org.