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State Budget Gaps - 6/19/15

Even after six years of economic expansion, many states continue to confront large budget gaps.  According to writer Julie Bosman, in certain states, lawmakers have gone into overtime with unresolved budgets, special sessions and threats of widespread government layoffs.  Through the first week of June, only twenty five states had passed budgets according to the National Association of State Budget Officers, which monitors legislative activity. 

Obviously, politics is at the heart of the matter.  In Kansas, centrist Republicans have joined Democrats in attributing that state’s 400 million dollar budget gap to large tax cuts passed in twenty twelve and twenty thirteen at the urging of Republican governor Sam Brownback.  In Louisiana, the Republican-controlled state legislature has been in a standoff with Republican governor Bobby Jindal as that state wrestles with a one point six billion dollar shortfall. 

The situation is particularly difficult in Alaska, which depends on oil revenue for roughly ninety percent of its budget.  That state is facing a shortfall that could reach 4 billion dollars in a budget of only about 5 billion dollars, with years of deficits projected for future years.  Compared to many states, Maryland’s budget situation is relatively strong.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.