State Revenues Coming In Slower Than Expected
State revenues for the first quarter of the new fiscal year are coming in below initial projections.
A slew of states, including behemoths like California, Florida and New York, are reporting less revenue than expected in the first quarter of the new fiscal year, leading to speculation of another round of budget cuts, Bloomberg BusinessWeek reports.
For fiscal year 2013, states are projecting a combined budget gap of $31.9 billion, according to the National Conference of State Legislatures. A combination of factors, such as the stagnant stock market and concerns about the European debt crisis, have led to decreased economic confidence, which then pushes down tax revenues, BusinessWeek reports.
California's expected revenues fell short by 3 percent in the first three months of the fiscal year, according to the news agency. If the state falls short by more than $1 billion, automatic cuts will be enacted for the state's schools. New York may face a $2.4 billion deficit because of decreased revenue from Wall Street and steady unemployment.
Economists blamed the stubborn unemployment figures for the persistent deficits.
"It's going to be quite a while before happy days are here again for many state legislatures," John J. Pitney Jr., a politics professor at Claremont McKenna College in Claremont, California, told BusinessWeek. "There is such weak job growth and income growth. Everything that should be up is down."