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The Economist, "Time to turn out the lights: State fiscal crises may deepen America's downturn", April 3, 2008
. . . The last recession was unusually bad for states' budgets. Donald Boyd of the Rockefeller Institute of Government, the public-policy research arm of the State University of New York, found that in the recessions of the early 1980s and 1990s state tax revenues declined at about the same rate as the national economy. In the last recession, however, the decline in real state revenue was vastly disproportionate to that of the economy as a whole, mainly due to a big drop in capital-gains-tax receipts. The question for the states is which downturn the current one will look like . . . Newsweek, "Colleges' New Tuition Crisis", Jane Bryant Quinn, February 2006 …The majority of states, strapped for tax money, are slashing spending on public higher ed. Over the past two years, 27 states have cut their appropriations and 17 have raised them (sometimes by small amounts), while six have held essentially even (that's a cut in real terms). Even when the economy returns to normal, all but a handful of states won't be able to fund their current level of public services without raising taxes, says Donald Boyd of the Rockefeller Institute of Government… The Wall Street Journal, "Hitting the Roof: Homeowners Push for Limits As Property-Tax Bills Soar, States Try Various Measures", Ray A. Smith, June 8, 2005 …Given that state and local budgets are stretched despite the increase in tax revenue from higher assessments, widespread cuts in property-tax rates appear unlikely. Economic growth needs to be strong enough to boost sales and income-tax revenue, some of which trickles down to local governments. "Even with the improved economy and legislated tax increases, state tax revenue on average remains about 7% below its 2000 peak," says Donald Boyd, director of the fiscal studies program at the Nelson A. Rockefeller Institute of Government, the public-policy research arm of the State University of New York… The Bond Buyer, "State & Local Finance: Report: States Find Ways to Cut But Medicaid Isn't One of Them", Matthew Vadum, April 8, 2005 …Most states dealt with recent financial challenges by raising fees, reducing capital spending, and making small cuts in most programs, but spending on Medicaid continued to soar, according to a new report from the fiscal studies program of the Nelson A. Rockefeller Institute of Government. "Some may have expected states to take more drastic actions in the face of sharp revenue declines," said Donald Boyd, director of fiscal studies at the institute and author of the report, "New Census Data Offer Glimpses of States' Early Responses to the Fiscal Crisis." "But this analysis reveals that state budget actions followed patterns similar to those we saw after the last two recessions," Boyd said. Lawmakers and fiscal managers maintained spending levels by using one-shot resources, increasing fees modestly, reducing capital spending, and tapping reserves, he said…. Minnesota Public Radio, "Does Minnesota spend too much?", Michael Khoo, December 13, 2004 …the institute's director of fiscal studies, Don Boyd, says Minnesota remains a high-tax, high-service state. He says that doesn't necessarily reflect poor public stewardship. "It might come from greater preference for public services," said Boyd. "It might come from greater desire to provide, for example, health care for the needy and, of course, greater capacity to afford services. So you can't conclude from those kinds of numbers that somebody's somehow too high or too low." Boyd and others acknowledge, however, that the current budget strain is mainly the result of fast-growing spending in health and human services. The New York Times, "Rising Costs Prompt States To Reduce Medicaid Further", Robert Pear, September 23, 2003 …"The fiscal crisis facing states is far worse than the condition of the nation's economy," said Donald J. Boyd, director of fiscal studies at the Rockefeller Institute of Government, an arm of the State University of New York. "State tax revenue dropped sharply even as the nation's economic output grew at a slow pace in the past year," Dr. Boyd said…. Los Angeles Times, "Medicaid Feeling the Effects of the States' Fiscal Crisis", Vicki Kemper, September 23, 2003 …While elected officials blame ballooning Medicaid costs for their budget woes, a far bigger culprit is the dramatic drop in state tax revenues. The states' fiscal crisis is "driven by a sharp and sudden falloff in tax revenue," said Donald J. Boyd, director of fiscal studies at the Nelson A. Rockefeller Institute of Government. While state tax revenues fell 3.5% in the recession of 1991, for example, they plunged 7.4% in 2002, Boyd said… The Economist, "Tangled up in red", July 11 2002 …The Rockefeller Institute's Don Boyd argues that the states faced an almost ideal set of circumstances during the 1990s. Personal incomes were rising so fast that states could cut taxes and still boost revenues. At the same time, the cost of two of the main spending programmes was tamed. Medicaid (health care for the poor) is the second-largest item of state spending after education. In the mid-1990s, its costs stabilised as a result of introducing "managed care" into the health system, and because the poor were doing relatively well, cutting enrolment. Meanwhile, the cost of welfare, their third-biggest expense, also dropped, thanks to strict new rules… … "Even if the markets rebound," says Mr Boyd, "it would take at least five years of 20% annual growth in capital-gains income for California to get back to the level of revenue it had in 2000. Unless another bubble of similar size appears, states are not going to see a return to 1990s-style income-tax gains for a long time." The Washington Post, "Stimulate With Care", Robert J. Samuelson, October 4, 2001 ...If any government spending is included in a stimulus proposal, it should also be simple, temporary -- and noncontroversial. One idea would be to give some extra funds to states for a year or two to help them avoid cutting their own budgets or raising taxes. Most states have balanced-budget requirements, so a slowing economy means they have to do one or the other. Don Boyd of the Rockefeller Institute of Government at the State University of New York projects that state budgets will rise only 1.3 percent in 2002 after adjusting for inflation, down from 4 percent in 2000…. The Christian Science Monitor, "For states, time to raise taxes", Liz Marlantes, August 24, 2001 …"It's nowhere near as bad as it has been in the past couple of recessions," says Donald Boyd, a policy analyst at the Nelson A. Rockefeller Institute in Albany, N.Y. "What we've seen so far is that states have dealt with their fiscal difficulties. And ... they did the easy thing first."… |
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