State Budgets Begin a Long Climb Out of the Red

The latest budget survey by the National Conference of State Legislatures concludes that states’ fiscal conditions are likely to be better in the current fiscal year, which began for most states on July 1, than in the previous year. But that doesn’t mean the situation will be good, says a report on the survey. While tax revenues are expected to pick up in most states, they may not increase enough to cover the loss of federal stimulus money that lawmakers used in the previous two years to cover shortfalls in education spending. In addition, states could lose billions of dollars if the federal government does not extend more-generous Medicaid-reimbursement formulas that were enacted as part of the American Reinvestment and Recovery Act of 2009, the report says.