Friday begins the new fiscal year for 46 states, most of which will begin the year with new budgets already in place. However, three states — Minnesota, Iowa, and Massachusetts — may miss the deadline.
Massachusetts will enter fiscal 2012 with no budget in place, as legislators aren’t set to take the issue to a vote until tomorrow. Iowa legislators passed a budget today, but Governor Terry Branstad will not be signing it before midnight because he says he wants to read it first. Fortunately for both Massachusetts and Iowa, it’s not necessary for budgets to be in place by midnight tonight. Massachusetts can continue to operate under a 10-day stopgap budget while Iowa’s governor approved a bill allowing the state to operate for another 30 days without a budget in place.
However, in Minnesota, partisan disagreements are threatening a government shutdown. Democratic Governor Mark Dayton and Republican legislative leaders have not been able to decide how to deal with the state’s $3.6 billion budget deficit, with the governor wanting cut spending as well as increase taxes on the wealthiest 1.9% of Minnesotans, while Republicans want to solely cut spending.
Overall, most states don’t have it quite so bad as Minnesota. While planning for the 2012 fiscal year has been especially difficult and budgets have been tight, tax collections were on the rise over the last year, though still below pre-recession levels. In order to combat $103 billion in shortfalls for the coming fiscal year, states had to adopt deep budget cuts, but in most cases were able to ultimately agree on a spending plan with time to spare.
Thirty-eight states already have signed budgets, while several others have fully prepared budgets just awaiting the governor’s approval, likely to come before the end of the day.
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