With no deal in sight, the cuts associated with sequestration took effect March 1. Now what? “The crystal ball here is very hazy. It’s hard to know what’s going to happen,” Michael Leachman, director of state fiscal research at the Center on Budget and Policy Priorities, said during a Council of State Governments’ webinar, “After Sequester: The Road Ahead for States.” “We don’t expect a deal to replace the 2013 sequestration, at least a freestanding bill, anytime soon.” But one thing is for certain—states will take a hit, and not just from the dollars they’ll lose in federal grant funding.

Stateline Midwest ~ January 2013

The start of video gaming in Illinois netted the state $1 million in November, and those figures could climb much higher in the months and years ahead.

Stateline Midwest ~ January 2013

The fiscal storm that rocked states late in the last decade has passed, but lawmakers will continue to feel its effects as they begin crafting new annual and biennial budgets.

In the wee hours of the New Year, Congress passed the American Tax Payers Relief Act to eliminate or delay the worst elements of the so called “fiscal cliff” and, hopefully, keep the ship of state from teetering into a new recession. While the drama over the fiscal cliff may have passed for the moment, the new Congress faces another set of crisis-laden deadlines within two months that could have big implications for state budgets.

Jennifer Burnett, CSG's fiscal policy expert, outlines the top five issues related to fiscal and economic development policy, including state revenue recovery, federal funds availability, Medicaid, state employee and retiree health care costs, and rethinking economic development strategies.  

The 113^th Congress was sworn in today and the new freshman class found their seats still warm from predecessors who worked well into the New Year to pass a cliff averting tax compromise.   While the drama over the fiscal cliff may have passed for the moment, the new Congress faces another set of crisis-laden deadlines that could have big implications for state budgets.

Despite all of the drama over the past few weeks, it looks like both sides are ready to split the difference.  The President began the negotiations by calling for $1.6 trillion in tax revenue, Speaker Boehner countered with $800 billion.  A deal would likely include roughly $1.2 trillion, the midpoint between both first offers.  The president began by stating that any deal must spare social safety net programs and offering only $400 billion in ill-defined cuts while Speaker Boehner said that entitlement reform and other spending cuts must form the majority of any deal.  Both sides are now hinting at a compromise including equal amounts of revenue and spending cuts.  

The American economy stands at the edge of a precipice created by expiring tax cuts and a host of spending reductions that could collectively shave $600 billion from the U.S. gross domestic product next year. This session featured a presentation and discussion led by Barry Anderson, deputy executive director of the National Governors Association, on the potential impact of the fiscal cliff and the prospects for congressional action to forestall it. Anderson previously served as acting director of the Congressional Budget Office, as well as in senior leadership roles in the Office of Management and Budget, the International Monetary Fund, and the Organization for Economic Cooperation and Development.