WASHINGTON — Despite talk of "windfalls" from federal tax revision, most states are in financial trouble, with 23 states cutting their budgets and 28 considering tax increases, a national study indicated Friday.
"(It's) a very tight fiscal condition . . . the worst we've seen in the 10 years that we've been doing this survey," Raymond Scheppach, executive director of the National Governors Assn., said. "The projection for the next several years would be a fair amount of (spending) restraint."
Revenue Gain Discounted
Scheppach said that, despite much discussion about the huge revenues coming to states as a result of federal tax revision, "the so-called 'windfall' will never materialize in most cases."
The average state revenue windfall makes up only 1.5% of total state general revenue, he said.
"If governors' recommendations are adopted, 80% of the revenue windfall--$4.5 billion--will be returned to the taxpayers," he said.
Scheppach said the survey showed that the financial health of state governments reflects economic conditions in the state.
Red Block of States
A map showing states that have cut their 1987 budgets was virtually solid red from the Mississippi River Valley west to the Continental Divide. A total of $3.15 billion has been cut from state budgets.