Arturo Perez, a fiscal analyst for the NCSL, said that states have stockpiled their highest level of financial reserves in almost 20 years. It's a situation they don't often have. For example, revenue is flowing into Minnesota at 10 percent higher than the budgeted amount for fiscal 1999, thanks to excess tax revenues and proceeds from the settlement of a lawsuit against the tobacco industry. Tax cuts are the big discussion right now. K-12 education is the second most talked about.
Several reasons explain the good health of most state economies.
For one, states have been planning prudently in recent years, despite booming local economies. In addition to beefing up their reserves, the states have also moderated their spending, according to another report last month, by the National Governors' Association and the National Association of State Budget Officers. Still, state legislatures are expected to tackle several school issues this year. In a separate report this month, the NCSL is forecasting that reduced class sizes and teacher recruitment and preparation will top the five education issues expected to be in the state spotlight in 1999. This session, they will work on legislation that grants a first-class education inside those classrooms.