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According to a report from the National Association of State Budget Officers, 33 states are going to miss their revenue targets for the recently ended 2017 fiscal year. NASBO also reported that 23 states made budget cuts during the fiscal year, up from eight in 2014, 14 in 2015 and 19 in 2016. A report from the Rockefeller Institute of Government, meanwhile, indicated that state revenues from major sources, like income property and sales taxes, adjusted for inflation, dipped 0.9 percent last year.
The reports cite multiple factors for the revenue declines, including falling commodity prices and the deferral of tax payments by corporations and wealthy individuals until next year in anticipation of federal tax reform. But the number of states reporting revenue shortfalls is the highest since 2010, when states were still reeling from the Great Recession and 36 missed their revenue projections. A rise in the number of states making mid-year budget cuts also tends to precede a recession. And revenue dips occurred before the recessions in 1991, 2002 and 2008. (HILL)