States May Contend With Budget Gaps Through Next Year, U.S. Treasurers Say

Receipts from income and sales taxes typically tend to lag behind the national economy, and any recent gains could be reversed should a slump occur. Last week, the federal government reported a surge in first-time claims for jobless benefits, to the highest level since November, while manufacturing activity in the Philadelphia area fell for the first time in a year, a sign of economic slowdown.

Mississippi Treasurer Tate Reeves said he anticipates that the national economy will continue to take a toll on his state’s finances.

“Things aren’t getting a lot better, but they’re no longer getting a lot worse,” he said. “We do think the recovery is going to be a slow one.”