State Capitals See Budget Issues From Housing Slump
- Jan 04, 2008
New York–U.S. state capitals are having trouble funding budget deficits due to the biggest increase in borrowing costs in three years, Bloomberg reported Friday.Since July, the extra yield that investors require on 10-year bonds from California, Florida, Massachusetts and New York have doubled. In addition, property values are declining–along with consumer spending, hurting sales tax revenue, which funds one-third of state budgets.As a result, the next fiscal year 13 states will have cash deficits totaling $30 billion, according to Washington research group The Center on Budget and Policy Priorities.A survey released last month by the National Conference of State Legislatures said the national housing decline has hurt tax revenue in 24 states. Three times as many respondents reported concern that the situation may continue through mid-2008.