As any sane, Progressive Democrat will tell you, a jobless recovery is not a recovery. Then again, even the Federal Reserve tacitly acknowledges this if you read the fine print.
A quick review of recent chain store revenue may be had here in, "Chain Store Sales Plummet," where we learn that these business revenues dropped a record 4.6% in May. I work in the software industry where my small business is focused upon providing finance technology to retailers. What I'd heard (it was consumers spending their income tax refunds and nothing more) from retailers across the country, which flew in the face of false MSM memes about so-called, improving retail stats over the past few months, is very much reiterated in a couple of sentences from the story linked earlier in this paragraph:
After a peculiar pick up in April, the chain store sales trendline has reverted to a complete collapse, dropping a whopping and record 4.6% in May. Looks like tax refund stimulus benefits have done their temporary magic and now all trends are back on their usual course.
In other words, so much for state budget sales tax revenue projections for the next few years, too.
So, with our economy "recovering," state budgets for basic services are tanking: "States' Budget Woes Are Poised to Get Even Worse."
States' Budget Woes Are Poised to Get Even Worse
By AMY MERRICK
Wall Street Journal
June 3, 2009
State budgets look bad now, but they are set to get worse.
The bulk of funds from the federal government's stimulus package will be allocated by 2011, but tax collections aren't likely to be enough to take their place -- even if the economy is recovering.
The drop in tax revenue is set to be deeper and last longer as collections have become more sensitive to business cycles in recent years. At the same time, states face growing health-care costs and the need to replenish pension programs funded by decimated investments. And some of the stimulus funds expand programs that will require state money to sustain them after the federal largesse runs out.
"There are so many issues that go way beyond the current downturn," said Scott Pattison, executive director of the National Association of State Budget Officers. "This is an awful time for states fiscally, but they're even more worried about 2011, 2012, 2013, 2014."
As the article tell us, states face aggregate budget shortfalls of at least $230 billion just through fiscal 2011. Federal stimulus funds, except for some costly-mandated programs with stringent requirements, will cover $130 billion of that. All of these state-directed funds, which will merely act as a patchwork effort to fund state programs just to maintain jobs, account for approximately half of all of the actual cash in the entire stimulus program. What does that leave Main Street for new job creation?
When today's federal assistance peters out, a number of state budget officers don't expect new tax revenue to replace it. As the recession grinds on, states are posting significant declines in revenue from their three major sources: sales, personal-income and corporate taxes.
Still, in general most forecasters see a very slow recovery, which suggests a commensurately slow upturn in state revenues. Federal Reserve officials, for instance, see unemployment, at 8.9% at last report, averaging between 9% and 9.5% next year and remaining elevated through 2011; some private forecasters are more pessimistic.
State tax collections could take five years or more from when the recession began in December 2007 to recover to prerecession levels, says Donald J. Boyd, senior fellow at the Nelson A. Rockefeller Institute of Government at the State University of New York.
The story, above, talks about unemployment averaging between 9%-9.5% next year. IMHO, those are absurdly optimistic numbers, especially in light of today's latest BLS' numbers for May.
Zero Hedge provides us with more on the National Association of State Budget Officers' Report:
...Revenues from all sources which include sales, personal income, corporate income and all other taxes and fees exceed expectations in two states, are on target in ten states, and are below expectations in thirty eight states. This is in contrast to fiscal 2008 when twenty-five states reported that revenue collections exceeded estimates.
Fiscal 2009 estimated tax collections of sales, personal income, and corporate income are 6.1 percent lower than actual fiscal 2008 collections. Specifically, sales tax collections are 3.2 percent lower and personal income tax collections are 6.6 percent lower.
Thirty-five states assume negative budget growth for fiscal 2010 governors' recommended general fund budgets, while 30 states are estimating negative growth budgets for fiscal 2009.
Corporate income tax collections are 15.2 percent lower for current fiscal 2009 estimates relative to actual fiscal 2008 collections.
Compared to fiscal 2009 collections, recommended fiscal 2010 budgets reflect a 3.0 percent increase in sales tax revenue, 1.3 percent increase in personal income tax revenue, and a 1.7 percent decrease in corporate income tax revenue.
Many states have since reported that April tax collections were well below estimates.
Because states recognize that an economic downturn may last for more than one year they are reluctant to deplete balances. This is in part due to concerns that the poor fiscal situation may continue through fiscal 2011...
Restating a sentence from above, ""This is an awful time for states fiscally, but they're even more worried about 2011, 2012, 2013, 2014."
Remember this when you see today's latest unemployment report (along with the "downward revision" to April's numbers buried deep within it).
Think about it the next time you opt to be complacent as you continue to hear of the trillions going to Wall Street, while Fed Chair Bernanke provides us with his conveniently-time-delayed "concern" about our federal deficits. In light of the timing of these statements of concern about the deficit now, as states slide deeper and deeper into budget-induced despair, one has to wonder aloud: "How dumb do those folks in D.C. think we are?"