From the Fort Wayne Journal-Gazette (citing Bloomberg News):
More than half of the 50 states expect to end their budget years with cash surpluses as a recovery in the economy buoys tax collections, a sign of easing pressure in statehouses across the country.
Twenty-nine state governments, including Indiana, New Jersey and Arizona, anticipate ending their fiscal years with more money on hand than forecast when they put together their annual budgets, according to a survey released Thursday by the Denver-based National Conference of State Legislatures. It marks the first time since the onset of the 2007 recession that so many states will have unspent funds.
“State fiscal conditions continue to improve at a slow and steady pace,” the legislatures group said in the report. “To date, collections have met or exceeded expectations in most states. Officials expressed cautious optimism about the fiscal situation, reflecting the slow, but steady, improvement.”
The improving financial outlook lessens the need for state officials to make the spending cuts that have exerted a drag on the economy since it emerged almost three years ago from the worst recession since the Great Depression. States have closed more than $500 billion of budget deficits over the last four years by raising taxes, cutting jobs and curbing spending.
Tax collections have risen for the last two years, pushing them back above the peak hit before the recession, according to the Albany, N.Y.-based Rockefeller Institute of Government.
The gains also mark a positive shift for local governments whose own budget struggles have been exaggerated by cutbacks in state aid, said Alan Schankel, who tracks the municipal bond market at Janney Montgomery Scott. As states recover, he said, they may send funds back to cities and counties.
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http://www.journalgazette.net/article/20120505/NEWS03/305059951/1066/SEARCH
