U.S. States Face ‘Staggered’ Recovery, Pew Center’s Urahn Says

[The Northerner]

April 17 (Bloomberg) -- U.S. states face a “staggered” recovery even as the national economy shows signs of stabilizing, Susan Urahn, a managing director at the Pew Center on the States, told investors on a conference call.

They may also have to contend with three to four more years of budget woes, said Laura LaRosa, director of fixed income at Glenmede Investment & Wealth Management in Philadelphia, on the call yesterday.

“When the recovery comes, it’s going to be staggered and slow,” Urahn said. “The lag happens because it takes time for the states’ unemployment rates to come down to pre-recession levels.”

Nationally, unemployment held at 9.7 percent in March for a third month, the Labor Department reported on April 2. The jobless rate reached a 26-year high of 10.1 percent in October. Employment has a direct impact on the ability to generate revenue through personal income tax, Urahn said.

States’ personal income-tax revenue fell 7.1 percent in January and February from the same period in 2009, and there is a risk the slide will extend into this quarter, the Nelson A. Rockefeller Institute of Government said in a report yesterday.

Tax revenue likely declined for a record sixth straight quarter in the first three months of the year, the institute’s deputy director, Robert Ward, said in congressional testimony on April 15.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.g8HmZ6Fwc