While most people are preparing to file tax returns, elected officials throughout the country are looking at government coffers and evaluating whether they will raise taxes. They are also making decisions about how to spend funding that has not been available to them in the last few years.
In the last decade since the financial recession, states have been fiscally restrained and elected officials, particularly legislators, have cut spending, forced reductions in staffing, deferred major maintenance and repairs, put large projects on hold and cut back on any funding that once flowed to local governments.
Cities, counties, school districts, hospitals, universities, and water districts have been forced to make do with less funding. Not only did these governmental entities lose federal funding that once was common, but they have also been forced to compensate for reduced state funding that was also once common. To the surprise of some, it appears that change is about to occur.
As of today, tax revenue flowing into state coffers is higher than was anticipated and 36 of 50 states are collecting tax revenue that is comparable to what was being received before the recession. Public officials in those states are now being pressured to catch up on investments and spending that have been postponed for many years since the economic downturn.
A loosening, rather than a restraining of revenue, may be occurring at the state level throughout the country. Legislators have already enacted appropriation increases for fiscal 2019 totaling $41.1 billion across all program areas. That compares to just $12.7 billion in new appropriations enacted in fiscal 2018.
With the exception of New York, whose fiscal year ends on March 31, and Texas, whose fiscal year ends Aug. 31, most states are discussing budget expansions for the next fiscal year. That should result in increased funding to local governments, job creation and economic stimulus which would generate even more tax increases in the future.
New York’s tax collections, unlike most other states, are down for the year. Yet, it appears that lawmakers will expand the state’s budget by about $176 billion. That’s a two percent spending increase over the current fiscal year and the budget is expected to include funding for numerous major projects. The governor said the state will invest $2.5 billion for clean water infrastructure and has proposed $150 billion for other infrastructure projects over the next five years. That amount includes $66 billion for transportation and $9 billion for affordable housing.
In January, as the Texas Legislature convened, the Comptroller of Public Accounts increased revenue estimates to $9 billion. That’s an eight percent increase. The state could have $119.12 billion to spend in the next biennium. Legislators are currently heavily focused on funding for education but infrastructure funding is also being discussed. Other anticipated spending includes more than $1 billion for disaster recovery funds for Hurricane Harvey-related damages. Both the House and Senate are proposing a 1.5 percent spending increase over last year to the Health and Human Services agency, but that includes federal funds. The net result is a decrease of about 3.2 percent. Many constituents and citizens are not happy with that possibility.
Nevada’s latest budget allocates $946 million over funding approved by the legislature in the last biennium. The new budget includes funding for information technology projects, such as an $11.5 million upgrade to the state’s criminal justice information system and $109 million for school security.
North Dakota’s state budget has increased significantly in tax revenue since the Great Recession. In fact, the increase is 47 percent, which is the largest increase in the country. Proposed funding includes approximately $280 million for city, county, township, and airport infrastructure projects. The aviation funding, which is being called Operation Prairie Dog, will allow cities and counties to be eligible for state funds from oil impact dollars. The state’s airports have seen significant increases in traffic so there appears to be a consensus that funding should flow quickly to aviation projects.
If Congress appropriates more funding for infrastructure spending at the regional levels of government, as most believe it will, the impact for economic stimulus will be even greater. Private-sector investment in public projects is also gaining momentum because of new federal tax incentives.
Overall, it appears that the stage is set and there is hope that the country’s elected officials will address the nation’s infrastructure assets, healthcare and education needs, and technology upgrades that are long overdue.
(Featured image by DepositPhotos)
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
Entrepreneurship: the Region Laâyoune-Sakia El Hamra Launches the Program RIYADA
RIYADA, the integrated program of support for project leaders who can benefit from PIAFE funding comes to promote the entrepreneurial...
Finlombarda Invests 1.5 Million in a Fund Promoted by P2P Lending October to Finance SMEs in Lombardy
In May 2020, the fintech company October launched a new direct lending fund dedicated exclusively to investments in loans to...
DeFi Projects Raised $200 Million in 2020 and $1 Billion since 2017
Geographically, between 2018 and Q1 2021, the largest funding to DeFi came from North America and Apac (80% of the...
Dirham Project: the World’s First Regulated Stable Currency
The team behind the project has implemented the dirham as a stable currency, the terms of the DAH protocol are...
Five Impact Investment Projects around the World
Impact investing gives investors the opportunity not only to earn a return on their money but also to have a...
Crypto6 days ago
Stablecoins: The New Kid On The Crypto Block
Cannabis6 days ago
Bill Authorizing Medical Cannabis Cultivation Advances in Brazilian Congress
Crypto7 days ago
Bitcoin Mining Banned, Search Engines Ban Exchanges: China Cracks Down
Biotech6 days ago
Investing in Respiratory Therapies: Saving 30 Million Euros per Year