States have faced financial ruin. Now they are swimming in the money.


The state’s fiscal situation was improving steadily. Then in June, weeks before the budget was due, state forecasters released a startling report: New Jersey’s tax collection estimates had improved by about $ 5.2 billion, or more than 10% of the final budget.

The result was a flurry of backstage haggling over how to spend the money. Some Democrats, whose party controls both houses of the Legislature, wanted to pay off the state’s inflated debt or pay more into the pension system.

In the end, they did both – by coming up with a $ 46.4 billion spending plan that includes $ 3.7 billion to pay down or avoid debt, a pension payment of $ 6.9 billion. dollars and $ 500 million in “extra” spending requested by individual lawmakers.

“This budget has provided us with an extraordinary and somewhat unprecedented opportunity to reinvent what we would like our economy, schools, workplaces and communities to look like through the dramatic about-face our economy has taken over the years. the last few months. State Treasurer Elizabeth Maher Muoio said before the governor enacted the budget.

The story of fiscal recovery in Florida has also been remarkably rapid. In March, lawmakers envisioned a projected budget deficit of nearly $ 3 billion.

Then, in early April, state economists told lawmakers they would have $ 2 billion in unexpected revenue. That money, combined with billions from the federal government, has helped pay for things like $ 2 billion for state transportation projects and $ 500 million for a new anti-rising level program. sea ​​and floods.

The record spending has put Florida Republicans in the awkward position of acknowledging that their state has been helped by billions of dollars from a Democratic administration.

Democratic Representative Charlie Crist, who plans to challenge DeSantis in 2022, lambasted the governor for touting the budget even after criticizing the stimulus package signed by President Joe Biden.

“While Governor DeSantis will try to claim credit today, the truth is that he opposed the US bailout,” Crist said in a statement. “He opposed funding that helps cities and schools recover from a tough year.”

State lawmakers in California were inundated with so much money that they couldn’t figure out how to spend it all at the start of the fiscal year. The state tax analyst advised them to wait for many decisions as the bureaucracy is not equipped to launch so many new programs at once with proper oversight in place.

They moved closer to a deal with Newsom but still don’t have a full deal nearly a week into the exercise.

Assembly member Vince Fong, who is the Republican vice-chairman of the Assembly’s budget committee, said the sheer amount of money envisioned in such a short period of time makes the budget process even more opaque. Major issues such as drought or forest fire prevention, education or broadband needs are not sufficiently addressed.

“Everything is rushed in my personal opinion, we are not having a fully fleshed out discussion,” Fong said in an interview on Tuesday. “I don’t think it’s productive or useful from an actual problem-solving standpoint.”

Even Rhode Island, a state with a revenue forecasting system considered a benchmark by rating agencies, saw revenues exceed expectations. Lawmakers made a number of changes to it with the extra money, passing a budget on Tuesday that exonerate more companies the state’s tax paycheck protection program loans; and spending more money on affordable housing in the state.

Treasurer General Seth Magaziner said the budget of over $ 13 billion was much higher than in previous years, but did not include the roughly $ 1.1 billion the state will get from the US bailout. Lawmakers are waiting until fall to craft a proposal to spend that money, and Magaziner would like more to be done on priorities like education, workforce training and infrastructure.

“I think this is a real opportunity, once in a generation, for Rhode Island and the different states across the country to use these resources to do transformational things that look to the future,” he said. -he declares. “I hope Rhode Island is able to seize this opportunity, and I hope states across the country can as well. It’s a real chance for us to do better.

Kevin Yamamura from California and Matt Dixon from Florida contributed to this report.


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