Continuum of State Fiscal Stress

It’s getting better all the time. The most important finding of this update of the continuum is that many states ended fiscal year (FY) 2013 on more secure footing than they anticipated at mid-year. This was largely foreseen, as changes in federal tax law led many high-income filers to claim capital gains and businesses to accelerate bonus and dividend payments. As a result, state tax collections were unusually strong. While those developments were of a one-time nature, they have the benefit of putting states in a stronger fiscal position going forward.