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Wednesday, December 31, 2014

State, local governments face massive, growing budget gaps in 2015 and beyond

As the calendar flips to 2015, fiscal pressures will continue to tax the budgets of state and local governments.

And that could mean higher taxes for many Americans.

Projections released this month by the Government Accountability Office show that state and local governments will see current gaps between revenues and expenditures continue to widen in 2015 and beyond. In aggregate, those governments are already underwater, and the amount of red ink will continue to grow over the next 50 years, unless changes are made, the GAO says.

Closing the gap will require aggregate budget cuts or tax increases of 18 percent.

"We calculated that closing the fiscal gap would require action to be taken today and maintained for each year equivalent to an 18 percent reduction in the state and local government sector's current expenditures. Closing the fiscal gap through revenue increases would require action of similar magnitude through increases in state and local tax revenues," the GAO found. "More likely, closing the fiscal gap would involve some combination of both expenditure reductions and revenue increases."

Translation: governments will continue to stare down the question of cutting budgets or raising taxes.

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Anonymous said...

This is just a cycle that the democrats create. They spend until it hurts and we try to balance our economy again.
However , it's way too late for any correction , It would take in excess of 50 years to balance our budget with a great deal of sacrifice .
The horizon dictates a civil up- rising or war.

Anonymous said...

Taxes, jobs, fiscal responsibility and professionalism should be high on the priority list for Wicomico County.

Anonymous said...

Drastic cuts or big tax increases ?

Hurt a few or damage many ?