(LOS ANGELES) Oct. 7, 2010 – Cutting back on services and increasing taxes won't be enough to stabilize state and municipal finances, even when the economy fully recovers. According to a new report from the Milken Institute and the Ewing Marion Kauffman Foundation, it's going to require real paradigm shifts: a fundamental restructuring of budgets and the entire budgeting process, sustainable revenue generation, new efficiencies and federal/state partnerships.
Ensuring State and Municipal Solvency outlines the tremendous fiscal challenges facing states and municipalities, including long-term structural issues like unfunded pension and health-care obligations, and outlines several options to stabilize the situation.
"With everyone focused on the federal government's fiscal challenges, it's easy to ignore the fundamental structural imbalances in state and local budgets," said study co-author Robert Litan, vice president for research and policy at the Kauffman Foundation. "But these budgets directly impact businesses and entrepreneurs. They can't plan for the future without knowing what their tax liabilities will be and what services will still be around for them and their employees."
To read the full, original article click on this link: New Report From Milken Institute and Kauffman Foundation Examines Back-to-Basics Solutions to Address Shortfalls in State and Municipal Budgets