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WT: Many states celebrate surpluses as Congress struggles with debt


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As Washington stares at rising national debt and projected deficits for years to come, many states are faced with the opposite problem: whether to spend their budget surpluses and, if so, on what.

At least a dozen states ended fiscal 2011 with surpluses. Indiana reported one of the largest, with an extra $1.2 billion in its accounts. Gov. Mitch Daniels, a Republican, on Friday authorized bonus payments of up to $1,000 for state employees. An employee who “meets expectations” will get $500, those who “exceed expectations” will receive $750 and “outstanding workers” will see an extra $1,000 in their August paychecks.

“No state anywhere comes close to Indiana’s record of spending tax dollars carefully, with total savings over the last six years in the billions. Your spending efficiency has enabled us to stay in the black even as revenues plummeted,” said Mr. Daniels, who recently flirted with a run for the White House but ultimately stayed out of the race.

While Indiana decided to reward its employees, other states are redirecting surplus funds into cash-strapped areas such as education. Idaho ended the year with an $85 million surplus, the majority of which will be funneled to public schools and colleges, Gov. C.L. “Butch” Otter, a Republican, said in a statement last week.

http://www.washingtontimes.com/news/2011/jul/17/many-states-celebrate-surpluses-as-congress-strugg/

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Looks like some state Govts get it!

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I wonder where the surplus came from? If it came from stimulus money or federal funds then boo on them. If it came from revenues and industry then Way to go!

If you look at what Indiana said, they have been in the black since 2005.

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I wonder where the surplus came from? If it came from stimulus money or federal funds then boo on them. If it came from revenues and industry then Way to go!

From that article.

The biggest drivers of surpluses are higher-than-expected tax collections. Thirteen states have reported revenue higher than anticipated, according to the National Association of State Budget Officers.

and

Spending reductions also played a big role. Many states made major cuts to education and other parts of their budgets. Even with better-than-expected tax revenue, those cuts were still necessary, partly because federal stimulus dollars, which propped up many state budgets over the past two years, have been fully expended.

So more tax money and less spending on education and other parts of the budget (but mostly education I would suspect since it's usually the elephant in the room) has put these states in the black.

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I'll give you PA as an example. We had a budget surplus of over 500 million. However we are billions in debt. That debt includes repaying government stimulus funds for unemployment benefits along with medicare and medicaid, and a looming pension explosion. Of course some representatives wanted to blow through it this year instead of saving it as part of a rainy day fund. I'm sure other states that have surpluses are in the same boat.

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