by Max Brantley
Arkansas is not alone in having a growing surplus of tax revenue. The LA Times reviews how states nationwide are reacting to bulging treasuries and inserts this worthwhile caution:
"States are enjoying the best fiscal situation they've seen in five years," said Arturo Perez, an analyst with the National Conference of State Legislatures in Denver.
But state financial officials aren't celebrating yet. Much of the new money comes not from higher wages of taxpayers, but from less sustainable sources, such as the super-heated housing market, skyrocketing corporate income taxes or taxes on investment gains earned by richer citizens.
"The good news on revenue has been generated from a very narrow base," Perez said.
That parallels the mixed record of the national economy, which grew at a robust 5.3% in the first three months of this year. Corporations are enjoying record profits, but the stock market has struggled to top 11,000, dropping sharply last week. And the value of the average worker's paycheck is being slowly eroded by inflation.
Because of anxieties about these dynamics — and memories of the massive deficits of a few years ago — state financial officials are being cautious with their newfound wealth.