Extra Credit – ECO 356
Current/Upcoming Issues in State/Local Finance
Search the news for recent articles (within the last 90 days) and describe the issue State/Local policy makers will have to address in the upcoming months. Provide background based on information learned during the semester, and offer your recommendations for consideration.
This article discusses the role state/local policy makers seek in developing the upcoming federal budget. As we discussed in class, Federal grants provided significant funding for the states in dealing with the Great Recession of the last several years. However, the funds under federal ARRA have essentially been spent, and states must look at other means to balance their budgets. Last year, the State of New York had a budget which provided minimal growth – funded in part by a tax on millionaires. This year, the state will be facing a budget deficit of over $1Billion, which will grow due to the impact of Hurricane Sandy. Policy makers will have to balance the budget by considering additional cuts to key spending areas, or increasing revenue.
My recommendation would be for the Governor to consider additional tax increases to fund the deficit . Spending reductions have already been taken in key areas such as education, and although we spend more than many other states, districts need additional time to adjust to the impact of the property tax cap
Each article with your analysis will be worth 2 points. Points will be applied to any missing homeworks, or if not applicable, can be used to offset a low exam score for a maximum of 10 points (ie. Five articles & analysis.)