Here's some economic news that has some interesting ramafications.
State lawmakers are saving lots of money for a rainy day because of improving economies and conservative economic forecasts, a report released Tuesday says.
So, now that their coffers are full, what next?
This is good news. And it seems to buttress the arguement that lowering taxes increases revenues.
The $57 billion total saved by legislatures around the country marks a 25 percent jump from the previous budget year and is one of the highest levels in decades.
That's great news for taxpayers, but governments usually find ways to spend every last penny they have so they can ask for more next year.
State governments saved about $1 out of every $10 in their budgets in the most recent fiscal year, according to a survey released at the annual meeting of the National Conference of State Legislatures.
Anyone who's been to any kind of financial planning seminar knows the basics.
The study credits conservative forecasting for the year-end balances, which are considered a top indicator of states' fiscal health.
Twenty-eight states' year-end balances increased over the 2004-2005 budget year, 19 states' balances declined and two experienced no change.
But it's still hard to get a leopard to change his spots.
Only three states — Nevada, New Hampshire and New Jersey — reported a decrease in spending compared with the previous year.
So, even though the coffers are full(er), it looks like behavior remains the same. And that does not bode well for taxpayers.
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