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States tend their piggy banks better

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Earth to Congress: It's time to stop defending your profligate earmarks and ignoring runaway entitlement spending. Take a cue from the states, which generally must keep balanced budgets. Out there, fiscal responsibility is still an honorable trait.

Most states learned the hard way after the booming '90s and during the budget-busting recession of 2002 that belt-tightening is needed even in fat years. The latest report from the National Governors Association and the National Association of State Budget Officers shows 37 states with tax revenues exceeding their budget spending by about 5 percent, with 10 more states on track to do the same.

Just four years ago, most states were scrambling to cut about $15 billion collectively from budgets after the bursting of the high-tech economic bubble.

Of course, the current, healthy economic growth in the US has once again generated high tax revenues that are filling state coffers with cash. And the temptation is still strong among many state politicians to spend that surplus on programs that may not look so affordable when the lean years return. Indeed, average spending for the states is the highest since the go-go year of 1999. But despite that, most statehouses are being more cautious, trying to keep the budget reserves they have built up and reduce long-term debt. And despite a stronger tendency among governors to propose modest tax cuts, the actual tax increases in dollar terms are exceeding tax reductions.


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