Nearly half of states are facing a budget shortfall. Here’s why that matters.

Curated by Paul Helmick

I’m a Technology CEO and Experienced Entrepreneur. I love helping people use technology to grow their business. 

  • We work with clients all across the country – most are market leaders in their state or region – and several are national – but they all are impacted to some degree by the health of the states in which they operate
  • State governments are scramble to get their finances in order while planning for potential federal tax cuts
  • Many states aren’t starting out in a good place, and things could possibly get much, much worse very quickly
  • Nearly half of all states are projected to have budget shortfalls for the fiscal year 2018, according to the National Association of State Budget Officers
  • Alaska, Connecticut, Nebraska, Oklahoma and Oregon all face deficits of around $1 billion
  • Our state, WV, faces a projected 2017-18 WV budget deficit nears $500M
  • Many states have made a series of policy decisions over the past several decades that have starved their state of the services that grow the economy and create good quality jobs – and they are still grappling with federal spending cuts put in place during the recession, which put a major strain on state and local budgets
  • As the country emerged from the downturn, many governors cut taxes in hopes of boosting economic growth but in many cases the projected growth never materialized – States also made steep cuts of their own during the recession and kept them in place afterward, leaving little padding in their budgets
  • Technology has also frustrated the problem for states that have relied on sales tax revenue from goods purchased within state lines with online shopping causing a portion of states’ tax revenue to evaporate
  • And as the country’s population ages, older consumers have also started spending less money on tangible goods, like homes and cars, and more on services such as health care that bring in less tax revenue
  • Defense spending, Medicare, Social Security and interest on the national debt make up more than 80 percent of the federal budget, with a much smaller portion of federal funds trickling down to state and local governments
  • Health care is the front and center in the coming budget fights at the federal and state level
  • for example, California alone receives more than $20 billion in ACA-related funding each year, according to the California Budget & Policy Center – If the state lost that funding, it would have to decide whether to drop health care coverage for millions of its residents or cut back spending elsewhere to make up the difference
  • Truly challenging times are ahead for states to balance their tax revenues and expenses
  • Full list of state budget deficits below:.

Which States Have State Budget Deficits or Shortfalls?

 

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