Agenda - Council - 10/27/1981 - Laserfiche WebLink

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Governors' report: Most states' fiscal I I I I I I I I I I I I I I I ! condition worsening By Robert Pe~r fiscal year 1981 and was expeded to Ncw York Times Service W--hieg~on, D.C. The ~ condlUon of mo~ state governments ba~ delerio~ted since 1979 and they ~ enable, with exist- ing revenue source~ to Increase ~ndthg to m~ke up for the fede~ aid this yem', according 'to a ~dy by ~e ~dy, ~ ~ w~ found ~t 30 ~nd mo~ money on o~Bo~ ~ ~ would ~e in ~ ~venue H~ld ~ who h~ ~ ~ ~te budget day, "I ~ow of no ~t~ . p[~ ~ o~t feda~ ~d cu~' by A key ~lor of floe of a ~ ~ve~ent ~ ~e · ~ount of money w~ ~ ~e end of ~e ~ y~ 1980 ~p~ ~ ~ ~ ~ ~nt ~ ~e full to 1.5 percent In the current ~ year. Another measure s~ows the number of ~l~te government workthg days that could be financed out of the ' balance left tn the gene~-ul fund at the end of the ~ year. The aver- age for aH states dropped from 22 working day'a at the end o! the year 1~80 to eight days ia 1981 - was expected to drop to four days in 1952. These proJec~oas were hased maim ty on data collected from state Eet officers last spring, before feder- al budget and Lax cuts were enacted. The budget cuts reduced by as much as 25 percent the amount of l. ederal money available for many beelth and socLal service prog~xr~ The tax cu~s sharply reduced the amount of revenue that can be re/sec[ by states that tie theLr corporate or pe]~onal tax rates to federal rates and depre- ciation schedules. · The federal chauges "w/Il cause many states significant fiscal prob- letup" the report said. Hymen Grossm~ a vice president of Standard & Poor's Corp., said that in the last few yea~ the bond-mUD& agency had lowered ratings for gen- erul obligation bonds issued by Wis- cons/n, Minnesota. OMO, California,. M~C~lS. an and Connecticut. The slip. in credit, he said, reflected econom- ic conditions in the states and their tendency' to spend more than they took h, CZah'e Cohen. a vice president of Moody's Investors Service, said that although there had been some ex- ware. "I woLfld have to agree thnh an over-ail condtL~io., s~ates are in less dedLrable fiscal condition nOW th.n they. were several years aso." Just ~ weelL she said, Moody's lowered the rating for general obli- gation bonds of the state of W..htn~ ton. partly because toxe~ were com- ing below previobs estimates. The s~udy, the sevenU~ annual cat soz-~ey of the States," takes issue with the view expressed_by some adml.leh-ation offlciaL~ that state .gover~menis ca~ ebsorb the shod: of reductions to federal aid because they ~dly trove balanced Some people "permit in portraying needed" for the normal gover~mene operaUo~s, the study said. ~ut t~ said the I~L~nc~ sbould be viewed ~ rathe' thnn ~ Of exces~v~ ~e ~tudy foand ¢on_~lder~bto al ~ro_rta~on in ~h~z' ~ he~ltiX. }Iovey ~dd s~tes tl~t dertve~l rev~ nue~ from oil. ~uch as T~ and Al~_qk~, or ~ ~ ~ North D~kot~ were do~ well. The slu~p f~ the automobtie lnd~ try ~ serloudy hurt the economies 'of Michigan, Iv.41~n~ and Ohio.