RIGHT AGAIN:

States out of the red but still seeing red: Budgets nationwide are improving after three years of shortfalls. Yet the long-term climate grows harsher. ( Daniel B. Wood, 12/02/03, The Christian Science Monitor)

States are finally bottoming out from a wrenching three-year dip in tax revenues - a shock made even more jarring by comparison to their 10-year run of record black ink in the 1990s.

Dozens of states report deficits of zero this month, as lawmakers have closed gaps that reached $80 billion last year and $200 billion since 2001. The improvement comes on the back of the country's recent leap in economic expansion. More-conservative spending plans have also helped.

But even as they begin to catch their breath, states are hunkering down for a whole new era of long-term needs, which could prompt continued tax overhauls, spending constraints, and efforts to "reinvent" government.

Chastened by tenacious catfights over taxation and programs, and eyeing major battles ahead over healthcare costs, education, and other issues, the bold and conservative alike aren't declaring budget victory just yet.

"States are [beginning] to look at what problems they have encountered because of tax structures and program outlays that are no longer tenable," says Arturo Perez, an analyst for the National Conference of State Legislatures. "Many have shifted away from the kinds of economies they had when current programs and taxation laws were put in place. And they are chastened by the scope of issues on the horizon that could come along and make their lives miserable."

Remember during the tax cut negotiations, liberals were demanding billions of dollars to "save the states from bankruptcy" and conservatives said to forget it, they just needed to get over the bad habits they developed in the 90s? Here's a perfect example of how a balanced budget amendment would help to discipline the Federal government.

Posted by Orrin Judd at December 1, 2003 9:05 PM