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5 States Are Facing Budget Shortfalls After Trump’s Tax Cuts

by Axios | 12.14.18

Most states have shown strong revenue performances throughout fiscal year 2019, but five states — Idaho, Maine, Missouri, New York and North Carolina — are experiencing shortfalls, according to a report from the National Association of State Budget Offices.

Why it matters: Those five states' underperformance is in part a reaction to 2017 GOP tax cuts. The states, like most others, are still assessing how the cuts affect them, and are making increases or decreases to their revenue collection forecasts for fiscal year 2019 accordingly.

Yes, but: The data used in the report was collected in September and October. The numbers are still subject to change, Kathryn White, a senior policy analyst for NABSO, told Axios.

  • "These [numbers] do often shift as you go. ... We'll get a much better look at where [these states] stand in our spring survey," White said.
  • Note: 46 states begin their fiscal years in July and end them in June, according to the report. The exceptions are New York, which starts its fiscal year on April 1; Texas, with a Sept. 1 start date; and Alabama and Michigan, which start their fiscal years on Oct. 1.

By the numbers: Already, 14 states are reporting that they're on pace to reach their target revenue collection goals for fiscal year 2019, and 19 states are reporting that they'll be able to exceed that goal.

  • Only two states reported shortfalls in fiscal year 2018, while 40 reported exceeding their forecast — the first time they've done that since fiscal year 2006.
  • States have also already increased appropriations by $41.1 billion year-over-year with more money going to education, Medicaid and other government services.

What's next: As states begin to bring in revenue from tax collections and other resources, they'll begin to get a better idea of where they stand in fiscal year 2019.

The WSJ first reported on the study.

Michael Sykes

Photo: John Greim/LightRocket via Getty Images

Axios

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(31)
  • Clint
    12/14/2018
    ···

    These weren’t just trumps tax cuts. Republicans as a-whole were catering to big business and the rich. The ones who line their pockets. trump doesn’t deserve all the blame this time. Every republican can share this one.

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  • Bernie
    12/14/2018
    ···

    Perhaps they should spend less?

    Like (9)
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  • Leon
    12/14/2018
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    Then start cutting spending.

    Like (7)
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  • Susan
    12/14/2018
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    IF TRUMP DID NOT GET ELECTED, OUR WHOLE COUNTRY WOULD HAVE BEEN IN RUINS!! So New York , etc., better get their get their hands out of the pot, get to work & Finally represent the People. #EnoughIsEnough

    Like (5)
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  • Dave
    12/15/2018
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    The federal government cutting support and pushing the cost and support to the state on Education, Medicaid and other government services, but keeping the money to pay for the tax cut!

    Like (3)
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  • shevotes
    12/14/2018
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    Hey New York: Go after that grifter president felon's past taxes and fraud.

    Like (3)
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  • Jonas
    12/14/2018
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    In case you missed it. Headline should read "states can't spend as much money as they used to, having hard time adjusting"

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  • Terry
    12/14/2018
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    It’s there problem expecting Federal monies to run there State Govt.

    Like (3)
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  • Marc
    12/15/2018
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    This tax law should be revisited to revise the concessions given to businesses and then divert them to ordinary workers and people

    Like (2)
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  • Jann
    12/14/2018
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    tRump is a criminal. Get him out of that office and take all the rest of them to!!

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  • Karynn
    12/14/2018
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    Of course they are. Follow the money. I bet their state’s legislators are profiting just like the president is from the office.

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  • ColonelMoose
    12/14/2018
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    Those states lost money because they were allowing federal taxes to subsidize state taxes. Once the loophole was closed they couldn’t find any other way to make other people pay for their shit. If your state lost money, replace the politicians. Stop whining. Stop pointing fingers. You as a voter are responsible because you believed bullshit.

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  • Dara
    12/17/2018
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    Kool-aid drinkers supported this now thebill has come due. Suck it up!

    Like (1)
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  • Matthew
    12/15/2018
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    Gee, the state I reside in is one of them. MAYBE IF MY “REPRESENTATIVES” DIDN’T HAVE THEIR HEADS SO FAR UP THE MANCHURIAN’S ASS, they could see what horrible policies he has wrought upon our country. So to my “reps” PULL YOUR HEADS OUT OF HIS ASS AND WAKE UP!!! Grow a spine. Grow some guts. Grow some balls. Start realizing YOU ARE PART OF THE PROBLEM and start thinking of ways to be part of the solution.

    Like (1)
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  • Julie
    12/15/2018
    ···

    These weren’t just trumps tax cuts. Republicans as a-whole were catering to big business and the rich. The ones who line their pockets. trump doesn’t deserve all the blame this time. Every republican can share this one.

    Like (1)
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  • Eunice
    12/14/2018
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    States should take responsibility for their own funding from state taxes: cut the non-essential programs and government bloat.

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  • Tooluser1
    12/14/2018
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    CUT. SPENDING.

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  • David
    12/14/2018
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    Agreed with the notion of an end to wasting taxpayers money. Start by dropping the wall idea.

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  • Michael
    12/14/2018
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    As a NC voter, I’m disappointed in the Congress members that voted For the 2017 Tax law and will be actively supporting their opponents in the next election. I would like to suggest the legislation, regulation, and taxation of marijuana in North Carolina to resolve the budget shortfall. Come on, try it, everyone’s doing it.😉😆

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  • Merry
    12/14/2018
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    All the way to the bank for those that the tax break helped. All the way to unemployement for those whos companies are keeping "their" money, downsizing/reducing the foot print so they say, while the rest struggle. Atlas Shrugged. Senators & congress talk like big shots but they only care about their own bank accounts and the next election. Senator Gillibrand is already talking 2020?

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