Pew Center on States Sees Impact of Fiscal Cliff on States as Mixed

In its report, “The Impact of the Fiscal Cliff on the States,” the center explains how the effects will “vary greatly based on the extent to which states are tied to the federal tax code and federal spending.” The Pew report specifies how each of the fiscal cliff effects will affect each state.  In many states, state tax revenues are projected to increase. However, the fiscal cliff would not simply be a blessing for state governments. Federal grants to these governments make up about one third of these governments’ revenues. The planned sequester of federal spending would cut some of this grant money. The report goes on to suggest that “the general economic slowdown that could result if the full fiscal cliff were allowed to take effect would likely overwhelm any of the separate components discussed here.”

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