States fear end of stimulus funds

Oct. 29, 2009 at 10:56 AM
share with facebook
share with twitter

WASHINGTON, Oct. 29 (UPI) -- Declining state tax collections are adding to fears of what will happen when federal stimulus money ends, government watchdogs said.

"It's hard to imagine what happens when (federal) stimulus money runs out," Craig Thiel, a budget expert at the Citizens Research Council of Michigan told USA Today.

State revenue collections fell 15 percent in the first half of the year and dropped 8.3 percent on average in the third quarter among eight states that report monthly, the newspaper reported Thursday.

In New York, tax collections in the third quarter dropped 8.9 percent. In Ohio, tax collections were off 12.1 percent July through September, although the state managed to hold the total revenue drop to 2.5 percent.

Revenue in Ohio was propped up by $363 million in federal stimulus funds.

"It's financial disaster in as far as the eye can see, and it gets worse when the stimulus runs out," said E.J. McMahon, director of the Empire Center for New York State Policy.

Most of the federal stimulus funds will run dry at the end of 2010, the newspaper said.

Trending Stories