States Face New Year in Good Financial Shape

By Robert C. Johnston

Short-term economic forecasts could help state lawmakers deliver on their high-priority agenda items, including reducing class sizes, improving teacher quality, and creating college-scholarship programs.

But as many legislative sessions begin this month, lawmakers will also try to balance such plans with tax cuts and take account of growing concern that the robust economies that states have been enjoying cannot last forever.

"We think states will be worried, but they are in good shape going into fiscal 2000, which is the budget they will address this year," said Donald J. Boyd, the director of the Center for the Study of the States at the Rockefeller Institute of...