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WASHINGTON – After watching states endure quarter after quarter of budget and fiscal crisis, the National Conference of State Legislatures has some good news: the end may be in sight. According to the NCSL, state fiscal officers are predicting that revenues will rebound in fiscal year 2004, and general fund ending balances are expected to rise slightly from FY 2003 levels. What’s more, no state is predicting a deficit at the end of FY 2003, said the NCSL. The organization said during the past three years, states have had to close a cumulative $200 billion budget gap. States that balanced their budgets during the fiscal crisis did so mostly without relying heavily on broad tax hikes. With 42 states reporting their information, the 2003 net increase in taxes so far is 1.3% of 2002 tax collections. Although the NCSL pointed out that the number might change as more states balance their budgets, the organization noted that this is only the second time in nine years states had to increase their taxes. From 1995 to 2001, states lowered taxes every year, as much as 2%. Instead of resorting to raising taxes, the states turned first to their reserves, specific fee increases, and cost-cutting measures. In addition to fee and tax increases, to balance budgets: * 31 states cut spending. Fourteen of these states imposed across-the-board cuts ranging from 1.5% to 15%. In addition, several states also imposed target cuts to programs such as corrections, Medicaid, and higher education. * 29 states tapped a variety of state funds. * 23 states reduced their state workforces or took other actions affecting state employees. * 13 states tapped rainy-day funds. * 11 states delayed capital projects or shifted them from pay-as-you go products to debt. * 6 states expanded gaming. -

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