This session explored what’s in store for your state in 2015 and beyond as experts forecast fiscal and economic trends for states and the nation. The discussion focused on the most significant fiscal and economic issues facing states—such as public pensions, tax reform and ways to foster entrepreneurship—and included insights about how states are tackling similar concerns. 

The New York Court of Appeals in June 2014 overturned New York City's highly publicized soda ban that limited purchases of fountain drinks to 16-ounce cups in an attempt to reduce constituents' consumption of soda.  Most states have levied taxes on soda purchase intending to influence consumer choices, promote public health and generate revenue. 

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A few months after it ranked first in a national study of state spending transparency, Indiana has taken another step to provide more information online to the public. The Management and Performance Hub opened this summer. It includes details on the state budget, public retirement system and tax revenue. The site also lists and tracks indicators of performance for various state agencies.

A May 2014 state-by-state survey conducted by National Public Radio (NPR) finds that the costs of the criminal justice system across the U.S. are increasingly being shifted to defendants and offenders. Specifically, defendants are now being charged for government services that were once free, including those that are constitutionally required. From the study:

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Low-income workers in Ohio will get additional tax relief as the result of changes made in June to the state’s biennial budget. Following last year’s creation of an earned income tax credit, the legislature chose to expand it — from 5 percent of the federal credit to 10 percent.
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When the Great Recession began to hit states, they had a total of $59.9 billion in reserves. A year later, total budget gaps were nearly double that figure, $117.3 billion.

“States found themselves woefully short in terms of the amount of savings they had to offset the budget shortfalls created by the crisis,” Robert Zahradnik of The Pew Charitable Trusts told lawmakers at the Midwestern Legislative Conference Annual Meeting. “A lot of that is because savings is not the highest priority when it comes to making state budgets.”

The fiscal crisis is over, but it has opened new questions about budget planning and management. Prior to the Great Recession, for example, a fiscal reserve of 5 percent of the total budget was considered a sound target. Now, Zahradnik said, the preferred goal tends to be between 8 and 10 percent. Part of the reason is that state revenue sources have simply become more volatile, thus the need to better plan for more-extreme “rainy days.”

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Most states in the region have a private license system for the sale of alcoholic beverages. Private enterprises, including liquor and grocery stores, apply for a license to sell alcohol. The licenses are granted at the discretion of the licensing authority in the state. Three states in the region — Iowa, Michigan and Ohio — are called control states. None of these states operates retail liquor stores, but they do control the sale of distilled spirits at the wholesale level.

The fiscal skies are clearing, but states still have some tough decisions to make.

Experts shared strategies states can use to improve their standing in a number of areas, including rainy day reserves, pensions and international trade, during Sunday’s session, Fiscal and Economic Outlook for 2015.

According to Mary Murphy of the Pew Charitable Trusts, state shortfalls outstripped savings nearly two-to-one during the Great Recession. Post-recession, however, state tax revenues are showing overall improvement.

Smuggled tobacco comes with many challenges and costs, and it’s not just lost tax dollars for states, speakers at the session, “Smuggled Tobacco: Straining States’ Bottom Lines,” said Sunday.

“The amount of money that become involved is enormous,” said G. Stewart Petoe, director of legal affairs for the Virginia State Crime Commission. “You make absolute fortunes trafficking black market cigarettes.”

As one dealer noted in a recording...

This session explored what’s in store for your state in 2015 and beyond as experts forecast fiscal and economic trends for states and the nation. The discussion focused on the most significant fiscal and economic issues facing states—such as public pensions, tax reform and ways to foster entrepreneurship—and included insights about how states are tackling similar concerns.

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