© 1991 by CSF Associates Inc.
State Fiscal Strategies for the 1990s: Balancing Budgets in a Recession
University of Pittsburgh
The fiscal crunch facing many states in FY 1991 has its roots in the recession, federal mandates, election-year politics, and rapid growth in spending for Medicaid and corrections. Southern and midwestern states that made drastic cuts in response to the 19811982 recession have fared relatively well, but states in the Northeast have faced tax increases, layoffs, cuts in services, and prolonged conflict over state budgets. Although the tax revolt has not led to appreciably lower taxes, it has made raising taxes more difficult, and has heralded a shift to "boutique government," which may create further fiscal problems in the long run. State tax increases and spending cutbacks may also delay recovery from the recession.