As California gets off the gurney, so does the nation? I first noted in February that California's tax receipts were rising faster than had been forecast, a signal that the state's economic collapse might have hit bottom. Now comes confirmation, via Bloomberg, that California is not alone. Other large state economies, including New York and New Jersey are recording similar revenue bumps.
The 15 largest states by population forecast a 3.9 percent gain in tax revenue in fiscal 2011, budget documents show. The 50 states on average may increase collections by about 3.5 percent, the first time in two years the figure is expected to grow, said Mark Zandi, chief economist at Moody's Economy.com.
The economic picture is by no means rosy -- revenues aren't forecast to return to 2008 levels until as late as 2013 -- but the change in direction goes a long way towards relaxing some of the pressure felt by state legislators as they watched their budgets implode.
Lawmakers now may be able to restore spending or avoid further reductions. California's Chiang this month scrapped a plan to delay tax refunds after revenue exceeded projections for three months.
Combine the news about state budgets with a surprising boost in consumer confidence driven by survey respondents who are feeling marginally more optimistic about their employment prospects, and you can almost begin to imagine a scenario in which an economic recovery starts feeling real to the majority of Americans, rather than just visible in rising stock prices.
UPDATE: Mary Williams Walsh has a considerably more negative look at longterm state budget obligations in today's New York Times.