(AP) - BUDGET WOES LIMIT SERVICES: U.S. states face long-term budget burdens that are already limiting their ability to pay for basic services such as law enforcement, schools and transportation, a report released Tuesday said.
TROUBLESOME TRENDS: Aging populations and rising health care costs are inflating Medicaid and pension expenses. At the same time, revenue from sales and gas taxes is shrinking. And grants from the federal government, which provide about a third of state revenue, are likely to decline.
MORE PLANNING AHEAD: The report recommends that states do more long-range budget planning. And they should build bigger "rainy day" funds when the economy is healthy, to offset the need for cuts in recessions.
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