In Tide of Red Ink, Some States Show Surpluses

It’s shaping up to be a tough financial year for many states. At least 30 of them have budget shortfalls, and President Donald Trump’s promises to scrap the Affordable Care Act and overhaul the federal tax code have created fiscal uncertainty.  But whatever happens in Washington, some states will be well positioned to deal with it without raising taxes or making deep spending cuts.  California, Georgia, Idaho and Utah are among the states that have put themselves on a solid fiscal footing by avoiding deep tax cuts, enacting targeted tax increases, and diverting some surplus money into “rainy day” funds to be tapped in leaner times. By taking those steps, and by forgoing the temptation to rely on a single revenue source, those states are in good financial shape heading into this year’s legislative sessions. Their strategies may be instructive for other states. Elizabeth McNichol, a senior fellow at the left-leaning Center on Budget and Policy Priorities, said the key is “to plan ahead and have a rainy day fund, specifically tied to the volatility of your specific tax system.”