At Least Six U.S. States Expect To Miss Revenue Targets: Report
Most U.S. states expect to hit their revenue targets this fiscal year, but at least six states say they could fall short, the National Conference of State Legislatures said on Wednesday.
All states except Vermont must end their fiscal years with balanced budgets, and so states that bring in less money than expected could have to cut spending, use savings or raise taxes to end the shortfalls. For nearly all states, fiscal 2015 ends on June 30.
Alaska, Arizona, Kentucky, Massachusetts, Michigan, and Vermont all expect to miss their revenue forecasts, according to the report. New Mexico and Indiana are lagging slightly.
Some states, such as Virginia and Maryland, have lowered their revenue forecasts, as well.
While Massachusetts is in a “stable financial situation,” both tax revenues and money from other sources are “coming in a little under benchmark,” the report found. The state said it will have to cut some spending to balance its budget.
Vermont's fiscal situation is problematical, according to the report. Income taxes are trailing forecasts that have already been lowered and corporate taxes could dip after the sale of a major company.
Meanwhile, Arizona is missing its budget's target by $71 million, even though the state's tax collections have grown since last fiscal year. Kentucky faces ongoing pressures on both revenues and expenditures, while Michigan is also seeing spending come in lower than expected, according to the report.
Falling oil prices are also taking a toll on state revenue. Alaska relies almost exclusively on oil and gas production for its tax revenue, and its budget was drafted when oil prices were nearly double current levels.
New Mexico expects its revenue will fall short both this fiscal year and next due to the shrinking severance tax. It will tap its large reserves to avoid cutting spending.
Kansas, Louisiana, Montana and Wyoming have cut their forecasts for severance tax collections, as well.
Some states, though, could end the fiscal year better than anticipated. Georgia, Oklahoma, Texas and Utah are all on track to beat their forecasts.