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The Wall Street Journal, "State, Local Tax Revenue Stagnates", Tom Herman, October 1, 2008
. . . Revenue collections were "superficially OK" during this year's April-June quarter, which hasn't yet been reported, says Donald J. Boyd, senior fellow at the Rockefeller Institute of Government. But since then, "things have gotten worse -- and are going to get a lot worse still," Mr. Boyd warns. . . . The Christian Science Monitor, "Buzz grows over state tax holidays", Patrik Jonsson, August 6, 2008 . . . "With regard to sales tax holidays, economists uniformly pan them and elected officials love them," says Don Boyd, a senior fellow at the Rockefeller Institute of Government, in Albany, N.Y. "They're not hugely costly, but the impact on the total amount of spending by consumers is virtually indiscernible. No state should expect any boost to the economy from a sales tax holiday". . . . The Bond Buyer, "1Q Losses in State Tax Revenue Could Spark Budget Cuts", Lynne Funk, July 3, 2008 . . . "To date, the tax revenue weakness has been mild when compared with past recessions," the institute's senior fellow and study co-author Don Boyd said in a release. "However, the seeds of greater fiscal stress are already sown - economic weakness is spreading rapidly and tax revenue from the continuing base should be very weak in the April-June quarter, although perhaps partially masked by payments with 2007 tax returns." But the rough times will grow even worse after June, the report said. "Many states finalized their 2008-09 budgets during the April-June quarter, when conditions may have misled forecasters into revenue projections that were too rosy," Boyd said. "Governors in some states may, then, face difficulty implementing their new budgets - raising the prospect of potential mid-year cuts and other actions to eliminate emerging gaps." The New York Times, "Budget Pain Hits States, With Relief Not in Sight, Jennifer Steinhauer, July 1, 2008" . . . Continued weakness in the national economy dims prospects for states in the near future, according to the authors of the report, by the Nelson A Rockefeller Institute of Government in Albany, which tracks state revenues. "There are signs that the economic weakness is very widespread," said Don Boyd, a senior fellow at the institute’s fiscal studies program. "Between this past May and three months prior, a lot more states were declining, and we have not caught up with them in the data yet. "Many more states," Mr. Boyd continued, "are having outright declines in their economies, and that is presumably a harbinger of budget problems.". . . Reuters, "Many U.S. states may have to cut budgets-report", Joan Gralla, July 1, 2008 . . . "After June, tax revenue is likely to be extremely weak as most states begin their fiscal years -- and such weakness may linger as the year progresses," said economist Don Boyd, who co-wrote the study for the Albany-based Rockefeller Institute. Given that many states finalized their budgets in the second quarter and projections were rosier, "Governors in some states may, then, face difficulty implementing their new budgets -- raising the prospect of potential midyear cuts and other actions to eliminate emerging gaps." . . . Tax collections also fell in another dozen states, partly reflecting the grip of the housing decline, which has been particularly severe in some Eastern seaboard states, including New Jersey and Rhode Island, Boyd said. . . Business Week, The Next Victim of the Real Estate Crisis: As the economy stalls, state and local governments will see less tax revenue roll in, Prashant Gopal, June 30, 2008 . . . Despite the revenue shortfalls, it could be some time before average taxpayers notice their garbage isn't being picked up as often or that their children are sharing a teacher with too many students. "Governments have ways of muting and stretching out the effects of these things," Donald Boyd, a senior fellow at the Rockefeller Institute, says of the declining state and local tax money. "They take the easiest actions first. They will draw down reserve funds first. They came into this with historically good reserves. . . You will see spending restraint. But for outright cuts, prisoners released, and teachers laid off, you would have to see something truly significant." . . . The Wall Street Journal, "States Move To Cut, Cap Property Taxes As Home Values Decline, Many Will Have to Make Up Lost Revenue by Other Means", Martin A. Vaughan, June 11, 2008 . . . Donald Boyd, a senior fellow at the State University of New York's Rockefeller Institute of Government, studied the impact of some recent housing busts on property-tax collections. He found that in such areas as Austin, Texas, and Grand Junction, Colo., property-tax collections saw yearly increases of up to 20% for years after home values had begun to drop. Tax assessments in most cases leveled off, but did not drop in proportion to the home-value decreases. The New York Post, New York’s Surplus Governments, Robert B. Ward, May 8, 2008 . . . A recent study by the Rockefeller Institute's Don Boyd found that New York's local governments are among the most heavily "layered" in the country. Typically, other states skip on either county or town government, or don't include cities under county governments. In another state, for instance, Yonkers wouldn't be part of Westchester County - the city would run social programs and other services itself. . . The Wall Street Journal, "Many States Ring Up Lower Sales-Tax Revenues", Sudeep Reddy, May 1, 2008 . . . "The sales-tax declines suggest that consumption, retail sales and the income needed to support spending are slowing considerably," authors Donald Boyd and Lucy Dadayan say in the report. Forty-five states collect sales taxes, which are the largest or second-largest tax source for most. . . The Economist, "Time to turn out the lights: State fiscal crises may deepen America's downturn", April 3, 2008 . . . The last recession was unusually bad for states' budgets. Donald Boyd of the Rockefeller Institute of Government, the public-policy research arm of the State University of New York, found that in the recessions of the early 1980s and 1990s state tax revenues declined at about the same rate as the national economy. In the last recession, however, the decline in real state revenue was vastly disproportionate to that of the economy as a whole, mainly due to a big drop in capital-gains-tax receipts. The question for the states is which downturn the current one will look like . . . Newsweek, "Colleges' New Tuition Crisis", Jane Bryant Quinn, February 2006 …The majority of states, strapped for tax money, are slashing spending on public higher ed. Over the past two years, 27 states have cut their appropriations and 17 have raised them (sometimes by small amounts), while six have held essentially even (that's a cut in real terms). Even when the economy returns to normal, all but a handful of states won't be able to fund their current level of public services without raising taxes, says Donald Boyd of the Rockefeller Institute of Government… The Wall Street Journal, "Hitting the Roof: Homeowners Push for Limits As Property-Tax Bills Soar, States Try Various Measures", Ray A. Smith, June 8, 2005 …Given that state and local budgets are stretched despite the increase in tax revenue from higher assessments, widespread cuts in property-tax rates appear unlikely. Economic growth needs to be strong enough to boost sales and income-tax revenue, some of which trickles down to local governments. "Even with the improved economy and legislated tax increases, state tax revenue on average remains about 7% below its 2000 peak," says Donald Boyd, director of the fiscal studies program at the Nelson A. Rockefeller Institute of Government, the public-policy research arm of the State University of New York… The Bond Buyer, "State & Local Finance: Report: States Find Ways to Cut But Medicaid Isn't One of Them", Matthew Vadum, April 8, 2005 …Most states dealt with recent financial challenges by raising fees, reducing capital spending, and making small cuts in most programs, but spending on Medicaid continued to soar, according to a new report from the fiscal studies program of the Nelson A. Rockefeller Institute of Government. "Some may have expected states to take more drastic actions in the face of sharp revenue declines," said Donald Boyd, director of fiscal studies at the institute and author of the report, "New Census Data Offer Glimpses of States' Early Responses to the Fiscal Crisis." "But this analysis reveals that state budget actions followed patterns similar to those we saw after the last two recessions," Boyd said. Lawmakers and fiscal managers maintained spending levels by using one-shot resources, increasing fees modestly, reducing capital spending, and tapping reserves, he said…. Minnesota Public Radio, "Does Minnesota spend too much?", Michael Khoo, December 13, 2004 …the institute's director of fiscal studies, Don Boyd, says Minnesota remains a high-tax, high-service state. He says that doesn't necessarily reflect poor public stewardship. "It might come from greater preference for public services," said Boyd. "It might come from greater desire to provide, for example, health care for the needy and, of course, greater capacity to afford services. So you can't conclude from those kinds of numbers that somebody's somehow too high or too low." Boyd and others acknowledge, however, that the current budget strain is mainly the result of fast-growing spending in health and human services. The New York Times, "Rising Costs Prompt States To Reduce Medicaid Further", Robert Pear, September 23, 2003 …"The fiscal crisis facing states is far worse than the condition of the nation's economy," said Donald J. Boyd, director of fiscal studies at the Rockefeller Institute of Government, an arm of the State University of New York. "State tax revenue dropped sharply even as the nation's economic output grew at a slow pace in the past year," Dr. Boyd said…. Los Angeles Times, "Medicaid Feeling the Effects of the States' Fiscal Crisis", Vicki Kemper, September 23, 2003 …While elected officials blame ballooning Medicaid costs for their budget woes, a far bigger culprit is the dramatic drop in state tax revenues. The states' fiscal crisis is "driven by a sharp and sudden falloff in tax revenue," said Donald J. Boyd, director of fiscal studies at the Nelson A. Rockefeller Institute of Government. While state tax revenues fell 3.5% in the recession of 1991, for example, they plunged 7.4% in 2002, Boyd said… The Economist, "Tangled up in red", July 11 2002 …The Rockefeller Institute's Don Boyd argues that the states faced an almost ideal set of circumstances during the 1990s. Personal incomes were rising so fast that states could cut taxes and still boost revenues. At the same time, the cost of two of the main spending programmes was tamed. Medicaid (health care for the poor) is the second-largest item of state spending after education. In the mid-1990s, its costs stabilised as a result of introducing "managed care" into the health system, and because the poor were doing relatively well, cutting enrolment. Meanwhile, the cost of welfare, their third-biggest expense, also dropped, thanks to strict new rules… … "Even if the markets rebound," says Mr Boyd, "it would take at least five years of 20% annual growth in capital-gains income for California to get back to the level of revenue it had in 2000. Unless another bubble of similar size appears, states are not going to see a return to 1990s-style income-tax gains for a long time." The Washington Post, "Stimulate With Care", Robert J. Samuelson, October 4, 2001 ...If any government spending is included in a stimulus proposal, it should also be simple, temporary -- and noncontroversial. One idea would be to give some extra funds to states for a year or two to help them avoid cutting their own budgets or raising taxes. Most states have balanced-budget requirements, so a slowing economy means they have to do one or the other. Don Boyd of the Rockefeller Institute of Government at the State University of New York projects that state budgets will rise only 1.3 percent in 2002 after adjusting for inflation, down from 4 percent in 2000…. The Christian Science Monitor, "For states, time to raise taxes", Liz Marlantes, August 24, 2001 …"It's nowhere near as bad as it has been in the past couple of recessions," says Donald Boyd, a policy analyst at the Nelson A. Rockefeller Institute in Albany, N.Y. "What we've seen so far is that states have dealt with their fiscal difficulties. And ... they did the easy thing first."… |