Tag: state budgets

Budget Deficits And Massive Governments Layoffs Stalled The Last Economic Recovery. But This Time Could Be Different.

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/01/27/budget-deficits-and-massive-governments-layoffs–prolonged-the-last-economic-recovery-but-this-time-could-be-different

Excerpt:

Orlando Cruz, senior vice president of ICMA-RC, says the layoffs following the Great Recession took years to recover from. “The layoffs, the furloughs, the early retirements we saw then really put states and localities in a hole through next decade to the point where — even before Covid — they had hard time recruiting in certain skill sets,” he said.

Now, he added, “governments are thinking strategically in terms of hiring.” State and local worker layoffs appear to have peaked in April — that’s different from the slow and steady layoffs that occurred over many months during the last recession. “Governments know they have to compete with other sectors for talent,” Cruz said during a call with reporters. What’s more, he said, budget constraints in the coming years will “make it harder to back fill those positions laid off.”

Author(s): Liz Farmer

Publication Date: 27 January 2021

Publication Site: Forbes

CT budget debate heats up quickly over equity

Mary Pat Campbell
CT budget debate heats up quickly over equity

Excerpt:

Urban Democratic lawmakers attacked Gov. Ned Lamont’s new budget proposal Thursday, charging the two-year package does little to nothing to reverse long-standing gaps in education, health care and economic opportunity.

During a two-hour hearing with Lamont’s budget director, the governor’s fellow Democrats on the Appropriations Committee also questioned whether the $46 billion biennial package sets Connecticut up for another budget crisis after the next state election.

“I am so disappointed in this budget when it comes to human services,” said Rep. Cathy Abercrombie, D-Meriden. “Again, here we are, balancing a budget on the backs of our most vulnerable.”

Author(s): Keith Phaneuf

Publication Date: 11 February 2021

Publication Site: CT Mirror

Illinois Gov. JB Pritzker’s Budget Plan Won’t Push For An Income Tax Hike For Next Year

Mary Pat Campbell

Link: https://www.wbez.org/stories/illinois-gov-pritzkers-budget-plan-holds-the-line-on-income-taxes-for-next-year/fd2e0e14-bf3d-49c0-a4e8-5d9de7395b34

Excerpt:

Illinois Gov. JB Pritzker’s 2022 state budget proposal won’t include an income tax hike, but it will seek the elimination of $900 million in business tax credits and aims to hold spending at current levels, the governor’s office said Tuesday.

The Democratic governor will present his budget outline on Feb. 17. It’s Pritzker’s first spending plan since the November defeat of his constitutional amendment to impose a graduated income tax.

The outline he will present to lawmakers for the state fiscal year that begins July 1 includes a $3 billion deficit – less than the $5.5 billion originally forecast.

Author(s): Dave McKinney, Tony Arnold

Publication Date: 9 February 2021

Publication Site: WBEZ

Lamont leans heavily on federal aid to keep taxes flat in CT

Mary Pat Campbell
Lamont leans heavily on federal aid to keep taxes flat in CT

Excerpt:

Gov. Ned Lamont proposed a two-year, $46 billion budget Wednesday that relies on federal funding and state reserves to close a major deficit without significant tax hikes while bolstering aid for municipalities and school districts.

But the package also leaves Connecticut with several budget challenges to be resolved in the not-so-distant future.

The package would channel more than $400 million in emergency federal relief  to low-performing school districts. But it also would suspend plans to bolster regular state-funded aid for municipal schools by $90 million in the next two-year budget cycle.

Author(s): Keith Phaneuf

Publication Date: 10 February 2021

Publication Site: CT Mirror

How Pandemic-Driven Revenue Shortfalls Could Affect State Pension Contributions

Mary Pat Campbell

Link: https://www.pewtrusts.org/en/research-and-analysis/articles/2021/01/13/how-pandemic-driven-revenue-shortfalls-could-affect-state-pension-contributions

Excerpt:

As states respond to the Covid-19 pandemic, many also face severe revenue shortfalls because of the economic downturn. These gaps between resources and planned spending pose immediate challenges for policymakers, who must balance budgets while addressing increased demand for public health and other essential services. Some states have already tried to cut costs by reducing or delaying contributions to public pension plans, and others may consider doing so if federal aid to states does not materialize.

The pandemic’s effect on state budgets has been significant. Fiscal year 2020 marked the first time that state general fund revenues declined since the Great Recession, with preliminary projections issued since March showing that states expected fiscal 2021 revenues to fall below initial estimates by about 10%, on average. More recent estimates indicate that state revenue shortfalls could total more than $300 billion cumulatively over fiscal years 2020-22.

Author(s): David Draine & Stephanie Connolly

Publication Date: 13 January 2021

Publication Site: Pew Trusts