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Fiscal and Economic

States Start New Year,
Face Same Fiscal Challenges

 

LEXINGTON, Ky.--With a new year full of new possibilities just dawning, one of the most challenging issues facing state policymakers is likely to be an old foe--funding shortfalls.

CSG released its annual listing of the top 5 issues legislators will face this session in education, energy and the environment, fiscal, health, interstate compacts and transportation. The most pressing questions facing policymakers this legislative session most likely will center on revenues needed to fund the basic role of government.
While Congress was able to reach a last-minute budget deal in December, the cuts that came through sequestration still will impact states. And while the employment numbers are looking better across the country, the picture isn't as rosy as it may first appear. States are moving ahead to address many of their economic woes.
While President Barack Obama called for an increase in the federal minimum wage in his State of the Union, some states have already taken action to address their own minimum wage.
 
Quote from Jennifer Burnett, CSG Program Manager for Fiscal and Economic Policy
"While many states are beginning to see the light at the end of the tunnel, economic growth continues to be anemic and uneven, as state revenues are just getting back to pre-recession levels. Instability and intransigence at the federal level is trickling down to states, stifling economic growth and creating fiscal uncertainty, which could derail the delicate recovery.

"Federal spending cuts from sequestration will sting a little less thanks to the last-minute budget deal, but the effects of recent cuts, coupled with the watered-down sequestration cuts, will still leave states struggling to fill the gaps--particularly in education.

"Unemployment rates finally hit 7 percent in November--a five year low--but dig a little further and you can see the labor market is and will continue to struggle in 2014. Long-term unemployment is still near record highs, labor force participation rates are near record lows and the unemployment rate likely will continue its slow descent, ultimately hitting about 6.5 percent by year's end.

"President Obama has called for an increase in the federal minimum wage a number of times, but states already have taken action. Legislators and voters in five states decided to raise the minimum wage in 2013 and a majority of states have the issue on their agenda for 2014."

 

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