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Builders Watching How States Remedy Budget Deficits

Budget figures released recently by the American Legislative Exchange Council (ALEC) show a grim fiscal picture, with state deficits projected at nearly $95.2 billion for 2004 and the remainder of 2003.

Several states have already enacted, or are considering, a variety of tax increases. Others are pursuing major spending cuts, many of which can have an impact on public infrastructure.

Also, proposals to increase or cut property taxes continue to come up frequently before state legislatures. These decisions can have a major impact on impact fees and other assessments on new housing.

“One must wonder when state budgets will begin to see the light of day,” said Michael Flynn, director of policy and legislation for ALEC, the nation’s largest bipartisan organization of legislators.

“States continue to address deficits with a mix of spending cuts, tax increases and the use of one-time funds,” Flynn said. “But they’re using duct tape instead of fixing the plumbing.”

ALEC has identified the 10 states with the biggest deficits as of April:

• California, $31.4 billion
• New York, 11.5 billion
• New Jersey, $5.2 billion
• Texas, $4.95 billion
• Illinois, $4.8 billion
• Massachusetts, $3.2 billion
• Florida, $3 billion
• Pennsylvania, $2.4 billion
• Minnesota, $2.1 billion
• Maryland, $2 billion

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