Nicholas W. Jenny is a Senior
Policy Analyst of the Nelson A.
Rockefeller Institute of
Government and its Fiscal
Studies Program's primary
researcher on state revenue and
tax issues and trends. He
authors its quarterly State
Revenue Report, which tracks and analyzes trends in state tax collections and the
economic factors underlying trends in state revenues, as
well as the State Fiscal Brief series, which presents more
a in-depth analysis of various state fiscal issues. He
joined the Institute as a Fiscal Researcher in 1998, and
became Senior Policy Analyst in 2001. He has an MA in
Political Science and is a Ph.D. candidate at the
Rockefeller College of Public Affairs and Policy.
State budget deficits are larger than they have been in
at least a generation. For the most part, this was due to
the revenue crash of 2001-2002, which was more severe
than that of recent recessions and out of proportion to
the severity of the 2001-2002 recession. Much of the
crash was due to the same factors that created a
revenue boom in the 1990s: capital gains, wages for top
executives, some taxed stock options, bonuses, and other
kinds of income that were related to investment.
Because the economy and stock market are recovering
slowly and because high levels of personal consumption
cannot be sustained, it is likely that the states face a
painful fiscal future for some time to come.
By Nicholas W. Jenny