EDITORIAL: Looking ahead

By NEMS Daily Journal

The nationwide journal, “State Legislatures,” reports on the pulse of all 50 states and their governing bodies, pulling no punches and reporting with precise nonpartisanship.
The January issue explores the financial situation of the states going on two years after the recession officially was declared over.
The article reports cautionary information, including slowly rising bond interest rates spinning off the huge budget gaps carried by some of the largest states, particularly California, Texas and New York – about $60 billion total.
The article pinpoints one of the reasons for continuing, even growing problems, as the failure of some states to enact long-term financing solutions “when the budget gaps first formed at the start of the downturn, instead relying on delay tactics like one-time revenues and accounting tricks.”
While admitting such tactics may be a “dodge,” it doesn’t identify them as all bad because moving budget problems to better times takes some of the sting out of raising taxes and reducing spending.
The problem with the delays in solutions practiced by many states, including Mississippi, is that “hoped for better times have not materialized,” writer Christopher Thornberg’s reported.
The recovery so far is about one-third the pace of recovery after recessions in 1974 and 1982.
Mississippi business and political leaders are fully aware of that information, but bright spots offer encouragement – announcements like Southern Motion’s faster-than-expected jobs expansion in Pontotoc County, the location of a major solar-panel manufacturer in Hattiesburg, and continued workforce hiring at Toyota in Blue Springs.
The magazine reports nationwide bright spots as people with jobs work more hours, increasing their personal incomes, and with strong gains in the markets creating move revenues collected by the states in capital gains taxes.
An encouraging word also comes from the respected Kiplinger Report outlook:
“GDP will get a boost from the tax deal worked out by President Obama and the Republicans. Look for GDP growth, previously expected to match (2010’s) 2.8 percent gain, to advance to about 3.5 percent for 2011. The 2.8 percent pace, though much improved over the 2009 decline of 2.6 percent, still is subpar for a recovery. … The sluggish growth that followed a rousing 2009 fourth quarter (5 percent annualized growth) and first quarter in 2010 (3.7 percent annualized growth) has been raising fears that the economy may tumble into recession again. The White House-GOP pact slams the door on that worry.”
Cautious optimism is warranted as Mississippi makes decisions for the longer term.