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ECONOMIC OUTLOOK IS BRIGHTER, BUT SOME STATES STILL STRUGGLE WITH BUDGET SHORTFALLS

According to a new report from the National Conference of State Legislators (NCSL), the dire financial straits in which many states found themselves are beginning to ease. During fiscal 2003, 31 states faced budget deficits that totaled over $17.5 billion. Now, only 10 states face deficits, with a total of $2.8 billion in shortfalls. This news from NCSL comes as the federal government is reporting that the nation’s gross domestic product grew at the fastest pace since 1984.

Even though the economy is beginning to show signs of life, many states are still in financial trouble. Michigan, for example, faces a deficit of $505 million, or 5.6 percent, of its general fund, and $361 million, or 2.9 percent, of its School Aid Fund. In response, the state is expected to cut approximately $196 from its per pupil expenditures of $8,278. Even some states who are in better shape financially have already exhausted rainy-day funds in an effort to save education programs from the chopping block. Without these reserves education budgets could come back into play.

 Number of States With…  Nov. FY ’03  Nov. FY ’04
 Budget Gaps

 31

 10

 Revenues Above Forecast

 3

 21

 Revenues on Target

 10

 13

 Revenues Below Forecast

 37

 16

 A Stable Revenue Outlook

 8

 24

 Cumulative Budget Gap

 $17.5 billion

 $2.8 billion

 

The complete report is available at:
http://www.ncsl.org/programs/press/2003/pr031121.htm

 

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