2012 will be the worst year yet for state finances, report says

According to a new report from the Center on Budget and Policy Priorities, the 2012 fiscal year will be the worst yet for states, which have been experiencing severe budget shortfalls since 2009.

The report offers specific data to describe what we already knew: the tax revenue for most states has declined dramatically since the recession began in 2008, and states are having to cut both jobs and vital services.

Among the most interesting facts the report offers:

  • Forty-five states and Washington, DC, are anticipating budget shortfalls for the 2012 fiscal year, which begins July 1, 2011, in most states.
  • Federal assistance for states, which has helped cover the budget shortfalls in the past two years, will end, for the most part, this year.
  • States are planning “deep cuts to state services on top of the substantial cuts that states have already made since the start of the recession.”
  • Estimates are that state budget shortfalls will result in the loss of 850,000 jobs next year.
  • Although few states have drawn up their 2013 budgets yet, already 22 states are predicting shortfalls for that year, too.

This frightening data only reinforces our belief that it’s time to pass the Main Street Fairness Act. Although it wouldn’t solve the budget crisis on its own, it would help states increase their revenue by ensuring that online retailers collect the sales tax already due on online purchases, instead of requiring consumers to send that tax directly to states. It makes much more sense for online retailers to collect the tax themselves, just as bricks-and-mortar retailers do.

One Response to 2012 will be the worst year yet for state finances, report says

  1. […] nexus legislation has become increasingly popular as states face record budget shortfalls. New York, North Carolina, and Rhode Island all have affiliate nexus legislation on the books, […]

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