Mar 13, 2008 12:09 PM
Federal fiscal relief should be targeted to the states that need it, a new report by the Center on Budget and Policy Priorities says. The March 2008 report, “Economic Data Can Be Used to Target State Fiscal Relief Effectively,” ranks all 50 states according to recent changes in three economic measures — employment, poverty and housing foreclosures — and finds that 27 states, including New York, need fiscal relief now.
States across the country face budget shortfalls totaling at least $36 billion for 2009. To meet their balanced budget requirements, they will have to raise taxes and/or cut expenditures — both of which would reduce overall demand and thereby weaken the impact of the recent federal stimulus package, the report notes. Federal fiscal relief would limit the need for such actions.
In the last recession, Congress provided states with $20 billion in fiscal relief. The National Governors Associations is currently calling for $12 billion in relief. Among the 15 states described as being in “highest levels of distress” are New Jersey, California, Florida and Illinois. An additional 12 states, including New York, Connecticut, Pennsylvania and Virginia, are rated as less immediately distressed, though the report notes that fiscal relief should be expanded to all states should the economic downturn become deeper and more widespread.
The Center’s report, is available at www.cbpp.org/3-3-08sfp.
Center on Budget and Political
Priorities news release, March 3