"CR, how do states typically deal with falling revenues?"
They don't repair bridges, which then fall down. Welcome to the new America, land of "it can't be done." We're fresh out of cash. Spent it all in Iraq.
From Satyajit Das today: Mr Das said another $US1-$US5 trillion of assets would have to come back on to US bank balance sheets as a result of defaults on housing and other debts, and it was unclear how the banks could fund them -- issuance of preference shares by US banks was already at a record high. He said losses at financial institutions from the credit crunch were likely to almost double to $US400 billion.
States will most likely try to compete with the banks and the federal goverment for cash by selling municipal bonds to fund tax shortfalls. However at some point draconian cuts everywhere will be the norm- most likely at exactly the wrong time. Of course our goverment has access to the printing press.
No wait, says Sebastian, we're up 2.6% GDP year over year.. States don't need to cut anything - revenues will automatically turn up. In-fact they ought to help out by spending more. He doesn't read Rockefeller Institute Data because its so one-sided.
Here's a glimpse of what the states are up to: May 1 (Bloomberg) -- Pension bonds are making a comeback, as states and cities from Alaska to Philadelphia bet they can use the proceeds to help fill deficits in their retirement funds and still generate a higher return than what they pay in interest.
Officials may sell a record $35 billion of the securities this year after offerings declined since 2003, according to data compiled by Bloomberg. Connecticut issued $2.2 billion of pension debt last month, paying an average rate of 5.88 percent on money state officials project will earn 8.5 percent when invested.
I have to add this quote:It's the dumbest idea I ever heard,'' said New Jersey Governor Jon Corzine, the Democrat and former chairman of investment bank Goldman, Sachs & Co.It's speculating the way I would have speculated in my bond position at Goldman Sachs.'
And note that these are nominal sales tax receipts, they are not adjusted for inflation. In real terms, things are considerably worse.
Most states have (constitutional)balanced-budget requirements. So, when revenues decline, they are forced to cut back on their spending. This will come wherever it's easiest to cut, which often means personnel. Contractual obligations (such as already-let repair and reconstruction contracts for roads, bridges, etc.) are more difficult to cut.
Moving into budget preparations, expect to see states cut assistance to local governments, support for higher education...
More positive news: lower taxes = more money for consumers to spend elsewhere = positive for overall GDP and consumer discretionary and most every other stock.
Headline also says that decline is in most states but note not ALL states. So headline just as easily could have read:
Income Tax Revenues up in 15 States Reporting to Date.
Obviously the headline writers are biased (and bitter) bears.
Nikki, the Rockefeller Report says it is due to the increase. It also says part of SC's decline is due to their eliminating the tax on unprepared food.
Bob Dobbs, you're right. I think jg's attitude, that the only good government is a starved government, is the same one that has gotten us into this mess. A well-funded regulatory branch doesn't necessarily do a good job, but it's pretty darned sure a money-starved SEC (or FDA, or whatever) can't do much.
I never get a hat tip but I think I deserve one for calling the MetLife earnings today.
MetLife had net investment losses for the first quarter of $886 million. I'll bet their losses on mortgage-related securities were more than a billion, after netting out gains.
It's large. And it's just the tip of the iceberg. I'll bet MET reports mega net investment losses every quarter this year.
As I said before, runs on life insurance companies are nasty. There's no FDIC or Fed bailouts.
MetLife is probably too big for a run. It will be smaller life companies that get runned, at least at first.
There's three kinds of business that life companies have: 1) term insurance; 2) variable life and annuities tied to the stock market; and 3) fixed life and annuities, including whole life and universal life. The most vulnerable to a run will be a small company with heavy mortgage exposure (especially CDO) and biz weighted to the third category.
Mutual companies can't raise money by selling stock. They are owned by their policyholders. There will be mutual companies with heavy exposure to mortgage securities (assets) and fixed life/annuities (liabilities) that get reamed over the next 4 quarters.
Life insurance exposure to mortgage losses is a big evolving story that CR should be on top of.
You mean some states have sales tax? Gee, up here in New Hampshire we don't have to worry about that. Maybe because we make it up in the state income tax. Oh no, wait a minute, we don't have a state income tax either.
More positive news: lower taxes = more money for consumers to spend elsewhere = . . .
landlords jacking up rents on the working class & home buyers deciding they can afford a higher payment for the same house.
Rents & land valuations are the alpha and the omega drivers of the economy and until we address how our government and market policies are distorting the land market we will continue going in circles, without understanding.
Southeastern states were hit the hardest: nine of the 21 states reporting sales tax declines were in that region.
The economies of the "red" states are tanking, and the economy is always more important to voters than foreign policy. Perhaps this means we'll have a "blue" election winner come November....
In California the drop in retail will hit the cities & counties hardest.
Regardless, all forms of tax revenues will be declining going forward. IMHO it's about damned time the government learned to prioritize and make tough choices again. It's up to voters to let'em know what's really important.
p.s.: The idea that more money would've resulted in better regulation isn't even worth debating. We already had the regulations and they happily gutted them. They won't even enforce the regulations we have now!
property taxes dropping as well as exise taxes and all the other applicable fees associated with real estate sales is massive - washington state alone has exise taxes on each transfer in excess of 1.7 % - no sale no money to the state -CHOKE
Now we're back into a teflon market where bad or horrible news can't stop the maket from going up - water off a duck's back. The BULLS claim was employment remained strong so the economy can't go into recession and the market will stay strong. Now employment is cratering to recession numbers and the market defies that too. BULLS now claim to be seeing past the recession that they never saw coming.
Of course this can't go on forever as firms decline in profitability so PEs go to the moon, but irrational stock market behavior is new the normal.
WASHINGTON (AP) -- Don't be fooled by a larger-than-expected increase in consumer spending. People aren't buying more -- they're just paying more for what they buy.
That is raising doubts about whether the 130 million stimulus payments the government began sending out this week will be enough to lift consumers' sagging spirits.
p.s.: The idea that more money would've resulted in better regulation isn't even worth debating. We already had the regulations and they happily gutted them. They won't even enforce the regulations we have now!
I wasn't advocating more regulation, just more enforcement of the regulations that exist. And I want the Bushies gone so we can undo some of that "gutting." How can we expect the FDA, for instance, to inspect meat-packing plants and medical device plants when they've been given about, what, two? three? inspectors?
I've never understood why those who hate government, any government, not only run and get elected to government, but then don't even reduce the amount it spends! That's not "letting the market rule itself," it's just out-and-out cronyism and corruption.
Don't count on it RE. The reason MD tax revenue is up is that the Dems took over all branches of government last year and raised the sales tax 20% from 5 to 6%. But in reflection of what you said, the fool Governor recently said that he might have to put some of his plans for new "social" programs on hold for a while.
How is it that consumer spending is up by 1.0% (with services up 3.4%) in the recent 1st quarter GDP report when collectively the states are reporting that retail sales collections - based on spending - are down?
Rockefeller data is really very good, very useful for predictions. If you look at the both of them you can usually see what's coming down the pike at least three quarters before the uglies hit.
Rockefeller data showed inflation and legislatively-adjusted state tax receipts declining in both the third and the fourth quarters of 2007. Combined with the decline in private investment, it appear unequivocal that we entered into the classic definition of a recession last year.
Most of the gutting happened in the 90's, setting us up for where we are now. Both parties are to blame; heck, everybody's to blame. It's human nature to not sweat these things when the going is good, and then fall all over ourselves when we realize we went too far.
Sales use taxes can be as confusing as your income taxes. I was reviewing a sales tax systems this week that indicated that it "tracks over 73,000 taxing authorities in North America...".
Here were some interesting highlights:
CT has a tax on consulting services
NM taxes sales to the US govt, payable by the vendor.
CA taxes sales to CA govt agencies (this cuts the budgets by the amount of the tax and forwards to the General Fund)
Canada has a VAT of 15% or so
Grand Junction CO has a state, county and city sales tax
Full employment for me. Misery and waste for you (sorry).
Don't know about other states, but about 15 years ago CA extended sales tax to gasoline. So in addition to the traditional "per gallon" tax there is now ~8.5% sales tax.
With gas prices currently up about 18% over a year ago this would have jacked up sales tax revenue there.
After a drink and dinner, maybe I'll look up how much impact that really has.
"Fuel and Service Stations" provided 3.8% of CA sales tax revenue in FY 03-04; so it's probably 4-5% now.
Assuming no change in gas consumption in the last 12 months, the 18% increase in gas price implies 0.8% sales tax revenue increase. Not huge, but changes the total 0.9% drop in CA sales tax to a 1.7% drop in non-fuel tax sources.
"aarlrenter writes:
How is it that consumer spending is up by 1.0% (with services up 3.4%) in the recent 1st quarter GDP report when collectively the states are reporting that retail sales collections - based on spending - are down?"
The GDP "Personal Consumption Expenditure" has a lot of stuff in it that bears no resemlence to actual consumer spending. Some of the items are legitimate expenditures that need to go into GDP somewhere (value of health benefits) but don't meet the common sense meaning of "personal expenditure". Also, there's some completely bogosities mixed in there as well - value of sending kids to school, free checking accounts.
None of these will show up in sales taxes.
Also, a lot of the growth in categories in services are based on estimates - the underlying data are unavailable. They plug in previous values, which likely means that a lot of "growth" can be revised away in later releases of GDP.
The market largely ignores the GDP release, because of these data problems. On the other hand, tomorrow's Nonfarm Payroll report day. Only 10 hours until the fireworks!
If you study this data closely, you will see something interesting. While state tax revenues were generally weak in the fourth quarter, they weren't weak enough to account for all the huge budget deficits now being reported.
That means state spending has increased faster than budget.
Which is what I've been saying for months. The real barometer of personal economic pain in our society is how much money state/local govt. spends on the social safety net. That includes everything from police that patrol bandos to hospitals that pick up their bones after their crack pipes run out, to rehab centers and shelters that help them get through to the next bando.
You can't cut safety net spending in the middle of a recession. You have to figure out some place to buy the bandos a bus ticket and send them. It takes time.
The states and local govts. are screwed because they have to pay most of the cost of picking up the pieces.
It is going to get nasty her in South Florida. Total receipts down 10.3 percent. This decline in receipts during the height of the "season", spells big troubles ahead.
Schools and university's are in bad enough shape. Fire departments are next. They do need to move towards 12 hour shifts from 24.
Of course they are!!! By definition, politicians are corrupt. It's silly to think that one party is any better than the other. Both parties sell their soul to the highest bidder. That's the nature of the game. Best scenario is to have NEITHER party in full control.
State sales taxes are usually about a third of general fund revenue. Almost every state, other than California, has to balance revenue and expenditures. Tough to raise taxes in a recession so cuts will happen. Hiring freezes, cuts to Medicaid providers, cuts to schools. Not a pretty picture.
This will come wherever it's easiest to cut, which often means personnel. Contractual obligations (such as already-let repair and reconstruction contracts for roads, bridges, etc.) are more difficult to cut.
Contractual obligations to teachers and other mostly union public employees are pretty darn hard to cut too...
property taxes dropping as well as exise taxes and all the other applicable fees associated with real estate sales is massive - washington state alone has exise taxes on each transfer in excess of 1.7 % - no sale no money to the state -CHOKE
This money is, I believe, earmarked for capital projects, not operating expenses. Good news, bad news. Loss of this tax rev won't affect the ability to meet payroll--but it will cut into the money available for public works to repair neglected infrastructure while creating jobs we're going to be needing pretty soon.
How is it that consumer spending is up by 1.0% (with services up 3.4%) in the recent 1st quarter GDP report when collectively the states are reporting that retail sales collections - based on spending - are down?
As others have noted, no two states are alike on property tax systems. Some tax food, some don't; some tax this but not that. Some of the states may have changed tax rates up (or even down) during the comparison period, or started (or stopped) taxing something they were taxing before.
Some states like Washington (with no income tax and tough property tax limits) are highly dependent on sales--the tax where I live is above eight percent, an amount that includes local levies for criminal justice, public transit and something else I think. But WA doesn't tax food.
Also, many states (maybe all states) have instituted new measures in the past year to collect sales taxes from online commerce. This will also affect the numbers on this map.
John is right above, cutting the budget when you get to looking at the have-to-pays for these states isn't that easy. We shouldn't have all the bills...but that doesn't stop them from coming.
The legend has the first entry a "< -3%". Should it not be "> -3%"?
NO
X
CR, how do states typically deal with falling revenues ? Spending cuts ? Layoffs ? Also, how much does sales tax contribute towards state revenues ?
Regards.
"CR, how do states typically deal with falling revenues?"
They don't repair bridges, which then fall down. Welcome to the new America, land of "it can't be done." We're fresh out of cash. Spent it all in Iraq.
Sorry to be the one to have to tell you.
Arizona sales tax receipts have dropped 1% YoY.
Who needs sales tax?
From Satyajit Das today: Mr Das said another $US1-$US5 trillion of assets would have to come back on to US bank balance sheets as a result of defaults on housing and other debts, and it was unclear how the banks could fund them -- issuance of preference shares by US banks was already at a record high. He said losses at financial institutions from the credit crunch were likely to almost double to $US400 billion.
States will most likely try to compete with the banks and the federal goverment for cash by selling municipal bonds to fund tax shortfalls. However at some point draconian cuts everywhere will be the norm- most likely at exactly the wrong time. Of course our goverment has access to the printing press.
Johnny:
Working infrastructure is for p*ssies.
One more way we are normalizing living standards between China & India and the U.S.
No wait, says Sebastian, we're up 2.6% GDP year over year.. States don't need to cut anything - revenues will automatically turn up. In-fact they ought to help out by spending more. He doesn't read Rockefeller Institute Data because its so one-sided.
Here's a glimpse of what the states are up to: May 1 (Bloomberg) -- Pension bonds are making a comeback, as states and cities from Alaska to Philadelphia bet they can use the proceeds to help fill deficits in their retirement funds and still generate a higher return than what they pay in interest.
Officials may sell a record $35 billion of the securities this year after offerings declined since 2003, according to data compiled by Bloomberg. Connecticut issued $2.2 billion of pension debt last month, paying an average rate of 5.88 percent on money state officials project will earn 8.5 percent when invested.
I have to add this quote:It's the dumbest idea I ever heard,'' said New Jersey Governor Jon Corzine, the Democrat and former chairman of investment bank Goldman, Sachs & Co.It's speculating the way I would have speculated in my bond position at Goldman Sachs.'
If oil price turns red, Texas will turn dark blue!
And note that these are nominal sales tax receipts, they are not adjusted for inflation. In real terms, things are considerably worse.
Most states have (constitutional)balanced-budget requirements. So, when revenues decline, they are forced to cut back on their spending. This will come wherever it's easiest to cut, which often means personnel. Contractual obligations (such as already-let repair and reconstruction contracts for roads, bridges, etc.) are more difficult to cut.
Moving into budget preparations, expect to see states cut assistance to local governments, support for higher education...
Finally, with this -- falling tax revenues -- the politicians will be FORCED to cut out stupid spending.
Hooray!
Canseco loses home to foreclosure:
Yahoo! 404 - Page Not Found
More positive news: lower taxes = more money for consumers to spend elsewhere = positive for overall GDP and consumer discretionary and most every other stock.
jg writes:
Finally, with this -- falling tax revenues -- the politicians will be FORCED to cut out stupid spending.
The latest trend is to tax those who can pay even more
Headline also says that decline is in most states but note not ALL states. So headline just as easily could have read:
Income Tax Revenues up in 15 States Reporting to Date.
Obviously the headline writers are biased (and bitter) bears.
I am wondering if the boost in MD's tax collections is due to the increase in the tax, from 5% to 6%.
"Finally, with this -- falling tax revenues -- the politicians will be FORCED to cut out stupid spending."
The great debate of American politics is the definition of "stupid spending."
Nikki, the Rockefeller Report says it is due to the increase. It also says part of SC's decline is due to their eliminating the tax on unprepared food.
Bob Dobbs, you're right. I think jg's attitude, that the only good government is a starved government, is the same one that has gotten us into this mess. A well-funded regulatory branch doesn't necessarily do a good job, but it's pretty darned sure a money-starved SEC (or FDA, or whatever) can't do much.
It's dead, Jim!
"Finally, with this -- falling tax revenues -- the politicians will be FORCED to cut out stupid spending."
Dreamer.
OT
I never get a hat tip but I think I deserve one for calling the MetLife earnings today.
MetLife had net investment losses for the first quarter of $886 million. I'll bet their losses on mortgage-related securities were more than a billion, after netting out gains.
It's large. And it's just the tip of the iceberg. I'll bet MET reports mega net investment losses every quarter this year.
As I said before, runs on life insurance companies are nasty. There's no FDIC or Fed bailouts.
MetLife is probably too big for a run. It will be smaller life companies that get runned, at least at first.
There's three kinds of business that life companies have: 1) term insurance; 2) variable life and annuities tied to the stock market; and 3) fixed life and annuities, including whole life and universal life. The most vulnerable to a run will be a small company with heavy mortgage exposure (especially CDO) and biz weighted to the third category.
Mutual companies can't raise money by selling stock. They are owned by their policyholders. There will be mutual companies with heavy exposure to mortgage securities (assets) and fixed life/annuities (liabilities) that get reamed over the next 4 quarters.
Life insurance exposure to mortgage losses is a big evolving story that CR should be on top of.
You mean some states have sales tax? Gee, up here in New Hampshire we don't have to worry about that. Maybe because we make it up in the state income tax. Oh no, wait a minute, we don't have a state income tax either.
Aaaahhhhh. Gotta love it.
More positive news: lower taxes = more money for consumers to spend elsewhere = . . .
landlords jacking up rents on the working class & home buyers deciding they can afford a higher payment for the same house.
Rents & land valuations are the alpha and the omega drivers of the economy and until we address how our government and market policies are distorting the land market we will continue going in circles, without understanding.
rich, good call on MET. Up $1 then down $0.80 AH. The market is now ignoring anything that doesn't scream immediate BK.
So you can win the battles and lose the war...
Southeastern states were hit the hardest: nine of the 21 states reporting sales tax declines were in that region.
The economies of the "red" states are tanking, and the economy is always more important to voters than foreign policy. Perhaps this means we'll have a "blue" election winner come November....
In California the drop in retail will hit the cities & counties hardest.
Regardless, all forms of tax revenues will be declining going forward. IMHO it's about damned time the government learned to prioritize and make tough choices again. It's up to voters to let'em know what's really important.
p.s.: The idea that more money would've resulted in better regulation isn't even worth debating. We already had the regulations and they happily gutted them. They won't even enforce the regulations we have now!
I'm not worried. States will come up with creative ways to raise money. Example:
Nevada Governor intends to bill the widow of missing multimillionaire adventurer Steve Fossett for $687,000 the state spent in searching for the famed aviator last fall.
9NEWS.com | Colorado's Online News Leader | Nevada governor to bill Fossett widow for search expenses
property taxes dropping as well as exise taxes and all the other applicable fees associated with real estate sales is massive - washington state alone has exise taxes on each transfer in excess of 1.7 % - no sale no money to the state -CHOKE
Now we're back into a teflon market where bad or horrible news can't stop the maket from going up - water off a duck's back. The BULLS claim was employment remained strong so the economy can't go into recession and the market will stay strong. Now employment is cratering to recession numbers and the market defies that too. BULLS now claim to be seeing past the recession that they never saw coming.
Of course this can't go on forever as firms decline in profitability so PEs go to the moon, but irrational stock market behavior is new the normal.
The market is now ignoring anything that doesn't scream immediate BK.
Someone said (maybe here) that at a true bottom, the market ignores even very good news. We just have the opposite now, whatever it means.
Consumer spending up mainly because of sharp price increases
Thursday May 1, 5:56 pm ET
By Martin Crutsinger, AP Economics Writer
Consumer spending up in March mainly because of sharp price gains for a variety of products
WASHINGTON (AP) -- Don't be fooled by a larger-than-expected increase in consumer spending. People aren't buying more -- they're just paying more for what they buy.
That is raising doubts about whether the 130 million stimulus payments the government began sending out this week will be enough to lift consumers' sagging spirits.
@ barely
"...You didn't know it, you didn't think it could be done, in the final end he won the wars After losing every battle...."
p.s.: The idea that more money would've resulted in better regulation isn't even worth debating. We already had the regulations and they happily gutted them. They won't even enforce the regulations we have now!
I wasn't advocating more regulation, just more enforcement of the regulations that exist. And I want the Bushies gone so we can undo some of that "gutting." How can we expect the FDA, for instance, to inspect meat-packing plants and medical device plants when they've been given about, what, two? three? inspectors?
I've never understood why those who hate government, any government, not only run and get elected to government, but then don't even reduce the amount it spends! That's not "letting the market rule itself," it's just out-and-out cronyism and corruption.
Don't count on it RE. The reason MD tax revenue is up is that the Dems took over all branches of government last year and raised the sales tax 20% from 5 to 6%. But in reflection of what you said, the fool Governor recently said that he might have to put some of his plans for new "social" programs on hold for a while.
Georgia is one of the states in the Deep Blue Sea of falling revenues, and our governor keeps saying he is going to CUT taxes. BwaHaaHaa.
P.S. The City of Atlanta had major job cuts (25%) today due to falling revenue. The city also plans to raise its already high property taxes.
"Now employment is cratering to recession numbers and the market defies that too."
Historical Net Birth/Death Adjustments
Never underestimate the power of the B/D model for April especially in an election year.
How is it that consumer spending is up by 1.0% (with services up 3.4%) in the recent 1st quarter GDP report when collectively the states are reporting that retail sales collections - based on spending - are down?
Rockefeller data is really very good, very useful for predictions. If you look at the both of them you can usually see what's coming down the pike at least three quarters before the uglies hit.
Rockefeller data showed inflation and legislatively-adjusted state tax receipts declining in both the third and the fourth quarters of 2007. Combined with the decline in private investment, it appear unequivocal that we entered into the classic definition of a recession last year.
suecris,
Most of the gutting happened in the 90's, setting us up for where we are now. Both parties are to blame; heck, everybody's to blame. It's human nature to not sweat these things when the going is good, and then fall all over ourselves when we realize we went too far.
Sales use taxes can be as confusing as your income taxes. I was reviewing a sales tax systems this week that indicated that it "tracks over 73,000 taxing authorities in North America...".
Here were some interesting highlights:
CT has a tax on consulting services
NM taxes sales to the US govt, payable by the vendor.
CA taxes sales to CA govt agencies (this cuts the budgets by the amount of the tax and forwards to the General Fund)
Canada has a VAT of 15% or so
Grand Junction CO has a state, county and city sales tax
Full employment for me. Misery and waste for you (sorry).
Don't know about other states, but about 15 years ago CA extended sales tax to gasoline. So in addition to the traditional "per gallon" tax there is now ~8.5% sales tax.
With gas prices currently up about 18% over a year ago this would have jacked up sales tax revenue there.
After a drink and dinner, maybe I'll look up how much impact that really has.
Well, dinner's late so I looked it up.
"Fuel and Service Stations" provided 3.8% of CA sales tax revenue in FY 03-04; so it's probably 4-5% now.
Assuming no change in gas consumption in the last 12 months, the 18% increase in gas price implies 0.8% sales tax revenue increase. Not huge, but changes the total 0.9% drop in CA sales tax to a 1.7% drop in non-fuel tax sources.
"aarlrenter writes:
How is it that consumer spending is up by 1.0% (with services up 3.4%) in the recent 1st quarter GDP report when collectively the states are reporting that retail sales collections - based on spending - are down?"
The GDP "Personal Consumption Expenditure" has a lot of stuff in it that bears no resemlence to actual consumer spending. Some of the items are legitimate expenditures that need to go into GDP somewhere (value of health benefits) but don't meet the common sense meaning of "personal expenditure". Also, there's some completely bogosities mixed in there as well - value of sending kids to school, free checking accounts.
None of these will show up in sales taxes.
Also, a lot of the growth in categories in services are based on estimates - the underlying data are unavailable. They plug in previous values, which likely means that a lot of "growth" can be revised away in later releases of GDP.
The market largely ignores the GDP release, because of these data problems. On the other hand, tomorrow's Nonfarm Payroll report day. Only 10 hours until the fireworks!
If you study this data closely, you will see something interesting. While state tax revenues were generally weak in the fourth quarter, they weren't weak enough to account for all the huge budget deficits now being reported.
That means state spending has increased faster than budget.
Which is what I've been saying for months. The real barometer of personal economic pain in our society is how much money state/local govt. spends on the social safety net. That includes everything from police that patrol bandos to hospitals that pick up their bones after their crack pipes run out, to rehab centers and shelters that help them get through to the next bando.
You can't cut safety net spending in the middle of a recession. You have to figure out some place to buy the bandos a bus ticket and send them. It takes time.
The states and local govts. are screwed because they have to pay most of the cost of picking up the pieces.
It is going to get nasty her in South Florida. Total receipts down 10.3 percent. This decline in receipts during the height of the "season", spells big troubles ahead.
Schools and university's are in bad enough shape. Fire departments are next. They do need to move towards 12 hour shifts from 24.
Happy days are here again????
"Both parties are to blame"
Of course they are!!! By definition, politicians are corrupt. It's silly to think that one party is any better than the other. Both parties sell their soul to the highest bidder. That's the nature of the game. Best scenario is to have NEITHER party in full control.
State sales taxes are usually about a third of general fund revenue. Almost every state, other than California, has to balance revenue and expenditures. Tough to raise taxes in a recession so cuts will happen. Hiring freezes, cuts to Medicaid providers, cuts to schools. Not a pretty picture.
This will come wherever it's easiest to cut, which often means personnel. Contractual obligations (such as already-let repair and reconstruction contracts for roads, bridges, etc.) are more difficult to cut.
Contractual obligations to teachers and other mostly union public employees are pretty darn hard to cut too...
property taxes dropping as well as exise taxes and all the other applicable fees associated with real estate sales is massive - washington state alone has exise taxes on each transfer in excess of 1.7 % - no sale no money to the state -CHOKE
This money is, I believe, earmarked for capital projects, not operating expenses. Good news, bad news. Loss of this tax rev won't affect the ability to meet payroll--but it will cut into the money available for public works to repair neglected infrastructure while creating jobs we're going to be needing pretty soon.
How is it that consumer spending is up by 1.0% (with services up 3.4%) in the recent 1st quarter GDP report when collectively the states are reporting that retail sales collections - based on spending - are down?
As others have noted, no two states are alike on property tax systems. Some tax food, some don't; some tax this but not that. Some of the states may have changed tax rates up (or even down) during the comparison period, or started (or stopped) taxing something they were taxing before.
Some states like Washington (with no income tax and tough property tax limits) are highly dependent on sales--the tax where I live is above eight percent, an amount that includes local levies for criminal justice, public transit and something else I think. But WA doesn't tax food.
Also, many states (maybe all states) have instituted new measures in the past year to collect sales taxes from online commerce. This will also affect the numbers on this map.
rich, I do not understand the risk to life insurance policy holders in regard to losses at insurance companies.
John is right above, cutting the budget when you get to looking at the have-to-pays for these states isn't that easy. We shouldn't have all the bills...but that doesn't stop them from coming.
less taxes, less spending