The U.S. Northeast economy is growing
faster than the rest of the nation, allowing those states to generate surpluses and
pay down debt, Bloomberg News reported Tuesday.
“Our picture has improved steadily over the last year,”
said Massachusetts Treasurer Timothy Cahill, speaking in a panel
discussion for a regional conference of the National Association
of State Treasurers in Boston moderated by Bloomberg News.
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Treasurers from Rhode Island, Maine, Massachusetts, New
Hampshire, Connecticut and Maryland said revenue for the fiscal
year that ended June 30 exceeded expectations. Maine Treasurer
Dale McCormick reported the state had a $50 million surplus and
Maryland Treasurer Nancy Kopp said revenue exceeded estimated
revenue by $250 million, the report said.
Massachusetts recorded a $700 million surplus as consumer
purchases generated more sales tax receipts and the state reduced
spending, Cahill said. Rhode Island Treasurer Paul Tavares said
his state’s revenue was above expectations as well, although
higher state pension costs may erode gains.
U.S. state tax revenue collections have risen for three
straight quarters, a report this month by the Nelson
A. Rockefeller Institute of Government shows.
The increases have cut
projected budget gaps for fiscal 2005 to $36 billion, less than
half what it was a year earlier. The recession led to a decline in state income tax revenue,
and states drained budget reserves, cut spending, and raised
taxes and borrowing, Bloomberg reports.
The U.S. economy is forecast to grow 4.4 percent this year,
the fastest since 1999, according to the median of 54 economists
surveyed by Bloomberg News. In 2001, the economy grew 0.8
percent, the slowest since it shrank 0.2 percent in 1991.
New England states’ tax revenue grew 6.7 percent in the
second quarter, about the same as the U.S. average, according to
the Rockefeller Institute report, and far West states reported
the biggest increase at 10.9 percent, the report said.
Bloomberg News
