Federal Stimulus Funds Likely To Run Out Long Before State Income And Sales Tax Collections Reach Pre-Recession Levels

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State Net Capitol Journal's Lou Cannon reports that federal stimulus funds are likely to run out long before state income and sales tax collections reach pre-recession levels.

The federal stimulus has arguably been a godsend to states hit hard by the Great Recession. But with the national economic recovery coming along slower than hoped for, State Net Capitol Journal's Lou Cannon reports that cash-strapped states may be looking to Washington for help for a long time.

Cannon notes that the impending decline in federal dollars is just the latest round in what has been "an epic struggle to maintain a constant level of social services during a recession that has sent state revenues from sales, income and business taxes plummeting to their lowest levels since the Depression."

With the national health care reform debate pushing everything else to the side, Cannon says, it is easy to forget that most states budgets are still in dire straits. "But the Recovery Act, reminiscent of similar initiatives undertaken during President Franklin D. Roosevelt's New Deal, remains a big deal to the unemployed, to the working poor, to homeowners under water on their mortgages, and to small business owners of every description who are struggling to make ends meet," he says.

To get the full story, check out the new issue of the State Net Capitol Journal on the State Net Web site at http://www.statenet.com.

About State Net
State Net (http://www.statenet.com) has helped organizations track legislative and regulatory developments for more than 30 years. Headquartered in Sacramento, State Net monitors every bill in the 50 states, District of Columbia and Congress as well as all state agency regulations. The company delivers online services, issue-based consultation and analysis that enable the nation's leading organizations to effectively respond to opportunities and risks across the nation.

The State Net Capitol Journal delivers coverage of public policy issues from all 50 states. Featuring analysis of emerging trends, state budgets, governors, legislatures and elections, SNCJ readers gain an intelligent overview of the major political issues and events in state governments.

References: Cannon, Lou. (2010, March 20, 2010). "Will stimulus expire before economic recovery arrives?"


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