|
|
| |
| Wed, Dec. 3, 2008 |  |
 |
|
||
| |
Quickly recovered economy, conservative budgets lead many states to surpluses Sunday, Apr 22, 2007 By Jason Wiest Arkansas News Bureau LITTLE ROCK - Arkansas is among dozens of states nationwide that benefited from conservative budgeting and an economy that bounced back quickly from recession. Legislators in 42 states will carry over a surplus to use in budgeting for future fiscal years, and some states' piles of extra cash dwarf the $919 million Arkansas expects at the end of the fiscal year June 30, according to data from the National Conference of State Legislatures. Ten states now anticipate an extra $1 billion or more that they did not originally project. Texas leads the pack with a projected $7 billion surplus, followed by Florida with $2.74 billion and California with $1.91 billion, both of which projected $1 billion shortfalls. "The strengthening economy has helped states balance their budgets since the recession of the early part of the decade," NCSL Executive Director Bill Pound said. Arkansas' economy began slowing in early 2001 and slid dramatically after the Sept. 11 terror attacks. Budget cuts through 2003 totaled $222.4 million, according to the state Department of Finance and Administration. The economy recovered moderately in 2004, and combined with conservative budgeting, Arkansas recorded a $70 million surplus, DF&A Deputy Director Tim Leathers said. In the next two years, the state continued to budget conservatively while the economy grew faster than expected, leading to the large surplus, Leathers said. State legislative fiscal officers around the country attributed their surpluses to higher-than-expected revenues and stable spending needs, according to the NCSL report. Most states' overruns in spending were moderate, and 17 states have avoided running over budget so far this year, according the report. "(The strengthening economy) has also given some (states) the opportunity to boost rainy day funds, plug holes in programs consider tax cuts and even explore new ideas," Pound said. Arkansas' Legislature did not appropriate money for a rainy day fund this year, but lawmakers cut taxes by more than $300 million, allocated nearly half of the state surplus - $456 million - to pay for court-ordered improvements to public school facilities over the next two years and provided matching funds for a new cancer research center, among other things. At least nine states will create a rainy day fund or other savings accounts, which may limit how the money can be used, according to the report. But despite the extra money for many states, 14 states indicate that sales tax collections are below target, which could cause problems in future budgeting, according to the report. "We're concerned because sales-tax performance was a leading indicator of fiscal problems the last time we went into an economic downturn," Warren Deschenaux, director of Maryland's Office of Policy Analysis, said in a NCSL statement. Arkansas has no such concern, however, Leathers said. "We've been on track with our collections with the forecast and don't see it slipping, and we're budgeting conservatively for next year," he said. The conservative budget could allow for surpluses in future years but nothing like the $919 million the state is projected to end this fiscal year with, Leathers said. "We're not coming off those low years," Leathers said. "We can't expect that dramatic economic growth that we had. "We expect to continue to grow, but growing slower than we had in the past," Leathers said. "There's no way we can plan to have any kind of a surplus like we had in those years." |
