Posted on Thursday, January 27, 2011
"The deep and long recession devastated tax revenue. At the worst point, in early 2009, state and local tax revenue combined were down 11% from year-earlier levels... In the good times, governments enjoyed and spent a tax windfall; state and local tax revenue rose 36% in the five years before the bust...In the ensuing years, spending rose rapidly too...When the economy heals, state and local revenue will grow again. But that won't relieve unsustainable pressures that predate the recession, especially health costs...By any metric, and there's a debate over which is the right one, state and local governments haven't set aside enough money to cover pension or retiree health-benefit promises they've made to their workers."