Nonprofit Newswire | States’ Revenues Continue to Falter, Despite Rosy Projections

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May 17, 2010; Source: Wall Street Journal | According to the Wall Street Journal, April is frequently the biggest revenue month for many states. If that’s the case, the nation and the nonprofit sector are in big time trouble. We’ve been hearing that states had been predicting tax revenue increases in 2010 due to the supposedly improving economy. Early reports from some states indicate that tax revenues are down for the first quarter of 2010 compared to the same period of 2009 at the height (or depth) of the Great Recession.

April is turning out even worse, with tax collections down 26.4 percent in California, 11.8 percent in Pennsylvania, 10.2 percent in Kansas, and 3.6 percent in Missouri compared to the same month last year. What’s going on? The national press and the nonprofit press appear to have swallowed political PR hook, line, and sinker. We were all told that the economy is on the upswing, so tax revenues should also rise, and those terrible state budget gaps of FY2009 and FY2010 would begin to recede, albeit not disappear for sure, in FY2011.

The reality? Despite record bank profits and Wall Street bonuses, the economy in most states is still in the pits—and whatever improvement there is, it’s not enough to register with increased tax revenues. What has to happen? In terms of policy, the nation needs a second stimulus, no matter what it might be called, so that state government programs and nonprofit grant/contract recipients don’t completely tank. In terms of journalism, we have to stop taking political bravado on face value and demand, like Missourians, that they “show me” (or us) that there’s substance behind the words.—Rick Cohen