Happy Fiscal New Year: Jonathan Williams on American Radio Journal
As the boom years for state budgets post pandemic fade away, the states committed to fiscal responsibility will find themselves in a much stronger position.
In his latest American Radio Journal commentary, ALEC EVP of Policy and Chief Economist Jonathan Williams discussed post-pandemic budget priorities of states, highlighting California’s $38 billion deficit, Maryland’s tax increases for education and transportation, Florida’s reduced spending and tax relief, and Illinois’ tax increases to patch holes in its budget despite a shrinking tax base.
For most states, June 30 marks the end of the current fiscal year for those states, budget leaders have been hammering out details in state capitals over the past few months, and those will start to take effect at the end of the day. Passing a budget is the one item lawmakers are constitutionally required to pass during a session in general, and fiscal conditions this year represent a return to normal following the boom years after the pandemic in 2021 and ’22 when states saw a double-digit revenue growth.
This enabled some to binge on spending priorities, while many others funded long term tax cuts to increase their economic competitiveness. But since 2023, revenues have been more or less flat. It’s years like this that lawmakers really show their true priorities. Will they increase taxes to pay for ever expanding government services, or will they judiciously improve efficiency and focus on core functions of government to improve their state’s fiscal health?
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As the boom years for state budgets post pandemic fade away, the states committed to fiscal responsibility will find themselves in a much stronger position.