The National Association of State Budget Officers has released its 'Fiscal Survey of States' for Spring 2011. According to the NASBO, state general fund spending was $687 billion in fiscal year 2008 and expected to drop to $652 for 2011; the forecast for 2012 is also below the 2008 amount at $669 billion.
On Thursday, June 2, 2011 the Wall Street Journal reported 31 states forecast 2012 deficit spending budgets with the top three being Alabama, Nevada and California with deficit spending of 28 percent and higher. The NASBO reports Federal Financial Aid from the Recovery and Reinvestment Act dropped from $111.7 billion in 2010 to $89.4 for 2011 and is expected to decline to $23.3 billion in 2012.
In terms of state services that help individuals, 34 states implemented targeted budget cuts in 2011 per the NASBO report. These cuts included a range of government services such as State aid to Local School Districts, Student Financial Aid, Public Assistance, revenue matching, corrections institutions, Medicaid, debt services and more.
Judging by the NASBO data, states may be trying to avoid layoffs. However, the Congressional Budget Office has reported 'employment effects' of the American Recovery and Reinvestment Act have been waning since the end of 2010. So even if few layoffs result from state budget cuts, new state government jobs created in tandem with the Recovery Act have declined.
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