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The Nelson A. Rockefeller Institute of Government

State and Local Finance: Pre-2004 Archive

State and Local Finance Archive (Pre-2004)

2003 Tax and Budget Review

Eighteen states enacted significant tax increases in 2003. States also increased fees, made spending cuts, and used reserves to close their budget gaps.
Nicholas W. Jenny, December 2003

It's Crunch Time for State Budgets

State and local governments are responsible for delivering most domestic public services in the United States. The ongoing economic recovery has not yet swept away the effects of diminished state revenues and greater spending demands, and state and local finances continue to face the most severe crisis in recent times.
Richard P. Nathan, Donald J. Boyd, Nicholas W. Jenny, and Patricia L. Billen, November 2003

State Tax Revenue Shows Slight Improvement

State tax revenue increased in the July-September 2003 quarter, compared to the year before, by 0.6 percent after adjusting for the effects of legislation and inflation. This was the first real, adjusted state tax revenue growth in over two years.
Nicholas W. Jenny, November 2003

The Current State Fiscal Crisis and Its Aftermath

As the national economy weakened in 2000 and entered a recession in 2001, tax revenue plummeted, and states' spending pressures increased. States are likely to face continued fiscal stress for the next several years.
Donald Boyd, for the Kaiser Commission on Medicaid and the Uninsured, September 2003

The State Fiscal Crisis: How We Got Here, Where We May Be Going

This crisis has roots in two related problems: A bursting bubble, the undoing of unsustainable trends of the late 1990s, coupled with a cyclical downturn. Boyd concludes that good times for most states are probably at least 2-3 years away.
Donald J. Boyd, presented at the National Conference of State Legislatures' Leadership Staff Seminar,  Charleston, WV, September 4, 2003

State Fiscal Conditions: 2003 and Beyond

Even after the economy recovers, state finances are likely to be tight for several years.
Donald J. Boyd, in The Book of the States 2003 (The Council of State Governments, 2003)

Underlying State Revenue Picture Remains Bleak

State tax revenue declined in the April-June 2003 quarter, and for fiscal year 2003. When adjusted for population growth and inflation, state tax revenue has been declining significantly and continuously since mid-2001.
Nicholas W. Jenny, August 2003

Budget Balancing Tactics

Confronted with large gaps in their fiscal year 2004 budgets, states resorted to various tactics including fee increases, federal fiscal relief, tobacco-related funds, and the use of budget reserves.
Nicholas W. Jenny and James Orsi, August 2003

What's Happened to the State Personal Income Tax

State personal income tax revenue has declined for seven straight quarters from July 2001 through March 2003. This report examines the impact of withholding, final payments, and especially of steep declines in estimated tax payments, generally paid by high-income taxpayers on investments.
Nicholas W. Jenny, July 2003

State Budgetary Assumptions in 2003 — States Cautiously Projecting Recovery

States are expecting a slightly stronger economy in 2003 and near full recovery by 2004. They also project slowing growth in Medicaid and other caseloads. If states were not cautious enough in their projections, especially Medicaid, it will cause even more budget problems.
Nicholas W. Jenny and Cecilia Ferradino, July 2003

State Fiscal Crisis Far Worse Than Economy Would Suggest

The recent recession has been mild, but the state tax revenue loss has been more severe than in previous economic downturns.
Donald J. Boyd and Nicholas W. Jenny, May 2003

A Bad Year: Fiscal Year 2002 Tax Revenue Summary

State tax revenue declined by 5.6 percent in fiscal year 2002. Adjusted for legislated tax changes and inflation, the revenue decline was 7.7 percent — the worst decline in over a decade.
Nicholas W. Jenny, May 2003

Personal Income Tax: Once Strong Source of State Revenue Growth Is Now Source of Budget Problems

State personal income tax revenue growth was extremely strong in the late 1990s, but started to decline in 2001, punching holes into the budgets of many states.

The Fiscal State of States

The state's fiscal crisis is far worse than the overall state of the economy would suggest.
Donald J. Boyd, presented at the annual meeting of the National Federation of Municipal Analysts, Chicago, IL, April 30, 2003

Revenue Collections Still Weak in October-December Quarter

While state tax revenue did not decline as rapidly in the October-December 2002 quarter as it had earlier in the year, revenue is still running about nine percent off its peak before the recession.
Nicholas W. Jenny, April 2003

2002 Tax and Budget Review and 2003 Budget Preview

States made significant tax increases in 2002. States have also cut spending as fiscal year 2003 has progressed. With even larger budget gaps in the projected fiscal year 2004 budgets, there will likely be another round of tax increases and spending cuts in the coming year.
Nicholas W. Jenny, March 2003

Revenue Collections Remain Low in July-September Quarter

State tax revenue declined sharply in fiscal year 2002. While the July-September 2002 quarter was not as bad as the previous four quarters, state tax revenue remains weak.
Nicholas W. Jenny, November 2002

Overview of the Current State Fiscal Crisis

Boyd projects that states will face several years of difficult choices.
Donald J. Boyd, presented at "The Fiscal Crisis of the States" conference sponsored by The Brookings Institution's The Welfare Reform & Beyond Initiative, Washington, DC,, October 15, 2002

Large Decline in April-June 2002 Caps Terrible Year for States

Preliminary revenue numbers for the April-June 2002 quarter show that total state tax revenue declined for the fourth straight quarter.
Nicholas W. Jenny, August 2002

The Aging Government Workforce

The federal, state, and local government workforces tend to be older than the private sector workforce, and the proportion of workers age 45 and over has been increasing faster in the government workforce than the private sector.
Craig W. Abbey and Donald J. Boyd, July 2002

Special Report: April Personal Income Tax Revenues Decline Severely

A survey, conducted by the Rockefeller Institute of Government, the National Governors Association, the National Conference of State Legislatures, the Federation of Tax Administrators, and the National Association of State Budget Officers, which found that state personal income tax receipts declined sharply in April 2002 when compared to the previous year.
Nicholas W. Jenny, June 2002

Third Quarter Has Worst State Tax Revenue Decline Yet

Preliminary revenue numbers for the January-March 2002 quarter show that total state tax revenue declined by 8 percent, the third year-over-year drop in a row.
Nicholas W. Jenny, May 2002

Collapse of the Corporate Income Tax

The corporate income tax component of state tax revenue has been declining sharply since mid 2000.
Nicholas W. Jenny, April 2002

Fiscal 2001 Tax Revenue Growth: Weakness Appears

State tax revenue grew by 4.7 percent in fiscal year 2001; this was the slowest rate of growth in the last decade.
Nicholas W. Jenny, April 2002

States Will Be Raising Their Economic Forecasts But May Lower Their Revenue Forecasts

States may raise their forecasts of economically sensitive items such as sales tax revenue in accordance with the more optimistic economic outlook recently released by private forecasters.
Donald J. Boyd and Nicholas W. Jenny, March 2002

State Tax Revenue Declines for a Second Quarter

Preliminary numbers for the October-December 2001 quarter show that total state tax revenue declined by 2.9 percent.
Nicholas W. Jenny, February 2002

State Expansion of Medicaid Managed Care Slows

In the nineties, states expanded the use of managed care in Medicaid. Now, as Medicaid costs soar, the benefits of this shift are fading.
Nicholas W. Jenny and Haidy Brown, February 2003.

State Governments Are Not Likely to Cut Employment in the Current Fiscal Crisis

Data suggest that state government employment does not fall during economic downturns.
Donald J. Boyd, July 2002

K-12 Education Spending Up an Inflation-Adjusted 15 Percent Over the Last Decade

Expenditures per pupil on public primary and secondary education increased by nearly 15 percent from the 1991-92 school year to the current 2001-02 school year, adjusting for inflation.
Nicholas W. Jenny, May 2002

State Unemployment on the Rise: April 2002 Unemployment Rate Higher Than April 2001 in 47 States

In April 2002, national unemployment reached its highest rate since July of 1994. This increase is reflected in higher state unemployment rates.
Nicholas W. Jenny, May 2002

Growth in State Prison Populations Continues to Slow

State prison populations skyrocketed in the late 1980s and early 1990s until growth began to slow down in the late 1990s. This trend continued with growth in state prison populations declining to only 0.4 percent from 2000 to 2001.
Donald J. Boyd and Nicholas W. Jenny, April 2002

Long Rise in Education Spending Slows as Economy Weakens

Throughout the twentieth century, states and local school districts increased spending on elementary and secondary education dramatically.
Donald J. Boyd, March 2002

State Budgetary Assumptions in 2002 — The Economic Forecast Roller Coaster

Economic forecasts underlying state budgets have become out of date as the economy has strengthened.
Nicholas W. Jenny, June 2002

2001 Tax and Budget Summary

The seven year streak of significant tax cuts ended in 2001.
Nicholas W. Jenny, January 2002

Big Drop in State Revenue in July-September 2001 Quarter

Preliminary numbers for the July-September 2001 quarter show that total state tax revenue declined by 3.4 percent.
Nicholas W. Jenny and Donald J. Boyd, November 2001

Sales Tax Growth Slump Gets Worse

State sales tax revenue growth declined to 0.5 percent in the April-June 2001 quarter, down from 8.2 percent growth in January-March of 2000.
Nicholas W. Jenny and Donald J. Boyd, October 2001

State Budgets for 2002: Economic Slowdown Led States to Cut Spending and Draw on Reserves, But Tax Increases Were Rare

States generally managed to avoid major increases in taxes and used 2001 fiscal year surpluses, rainy day funds, and tobacco settlement funds to close FY 2002 budget gaps. Some states also cut spending significantly in 2001.
Nicholas W. Jenny and Donald J. Boyd, August 2001

State Corporate Income Tax Collections Decline Sharply

State corporate income tax collections have declined significantly for the last several months.
Nicholas W. Jenny and Donald J. Boyd, July 2001

Sales Tax Growth Slumps in 35 States

State sales tax revenue growth slowed to 3.3 percent in the January-March 2001 quarter, down from 8.2 percent in the January-March 2000 quarter.
Nicholas W. Jenny and Donald J. Boyd, July 2001

Revenue Problems Spread to the Northeast

The slowdown in state revenue growth that hit first in Midwestern and Southwestern states has spread to a total of 30 states, including those in the Northeast.
Nicholas W. Jenny and Donald J. Boyd, June 2001

State Budgetary Assumptions in 2001 — States Will Be Lowering Their Economic Forecasts

After five consecutive years of underforecasting economic growth and state revenue, states now appear likely to overestimate economic growth and revenue.
Nicholas W. Jenny and Donald J. Boyd, May 2001

Fiscal 2000 Tax Revenue Growth: Strongest of the Last Decade

State tax revenue grew 8.7 percent in fiscal year 2000, and would have grown 9.4 percent had there been no legislated tax changes.
Nicholas W. Jenny and Elizabeth I. Davis, February 2001

2000 Tax and Budget Summary

Fourteen states enacted significant tax cuts in 2000, reducing fiscal year 2001 revenues by $5.8 billion.
Nicholas W. Jenny, September 2000

States Predict Slowing But Still Strong Growth for 2000

States predict that economic growth will slow a bit from last year, but still remain fairly strong.
Elizabeth I. Davis, June 2000

State Fiscal Issues and Risks at the Start of a New Century

The extremely rapid income and sales tax growth rates of the 1990s are almost certainly unsustainable and likely to slow sharply in coming years. This could make it very difficult for states to finance even moderate spending growth. Donald J. Boyd, June 2000