Cash-Strapped States Seeking the Right Formula for Tough Times

Carvlin, Elizabeth; Shields, Yvette
June 2003
Bond Buyer;6/6/2003, Vol. 344 Issue 31651, p4
Trade Publication
Midwestern states are facing potential credit downgrades and the pressure on states brought about by the continuing fiscal challenges of a struggling economy in many cases has worsened as budget officials crafted spending plans covering fiscal periods beginning in 2003. Illinois closed a roughly $5 billion gap in its fiscal 2004 budget by raising casino taxes and other fees and closing certain tax loopholes to raise &dollar1.3 billion of new recurring revenues. Michigan started its budget negotiations for fiscal year 2004 with a $1.7 billion funding gap. The state's school aid budget, which fared well in prior years, has become a bigger problem as the state works on its 2004 budget. Wisconsin's Frank Hoadley has doubts about the state being able to eliminate its $5 billion shortfall without the use of deficit financing or tax increases.


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