Wyoming is the healthiest and Louisiana is in the worst financial shape among state governments, said a report issued Monday at the opening of the National Conference of State Legislatures convention.
Vice President George Bush was to address the convention by telephone Tuesday, and arrangements are being made for Democratic presidential nominee Gov. Michael Dukakis to talk to the 1,500 delegates later in the week.Legislative leaders said a strong economy plus modest tax increases helped some state governments improve their financial conditions during the past fiscal year. But they said states will be strained to meet future commitments as the federal government withdraws from some social programs.
The average surplus among states is 2.6 percent of their general-fund budgets, and fiscal experts suggest there should be a 5 percent cushion in the bank to meet emergencies.
Louisiana was 18.9 percent in the hole, according to the report, followed by Texas with 3.4 percent in the red. Massachusetts, Arkansas, Kentucky and West Virginia did not have any surplus for the fiscal year ending June 30.
On the other side of the scale, Wyoming ended with a 17.7 percent reserve, followed by Nebraska, Delaware and Hawaii all at 15 percent and Nevada at 14.8 percent.
Sen. Ted Strickland, D-Colo., president of the conference, told a news conference state governments are facing an uncertain future and there is "no magic formula" to raise money.
He predicted only one state, which he declined to name, would go for casino gambling in the next few years as a way to solve its problems. Lotteries, said Strickland, are tapering off in revenue after their initial popularity.
Steve Gold, fiscal analyst for the organization, said Massachusetts, California and New York "plunged into severe fiscal difficulty" last spring. He said a tax reform in California that was supposed to be revenue neutral actually ended up costing state government $700 million to $800 million. California ended up with an estimated .1 percent surplus. New York had a .2 percent.
The states, said Strickland, fear that the federal government may step into taxing areas that traditionally have been reserved for the states. He said his organization opposes a national sales tax. That, said Strickland, is a major source of revenue for states, cities and counties.