Spending caution

After a couple of years of huge gaps between spending demands and revenue, nearly two-thirds of all states expect to end the current fiscal year in the black.

That's good news for many reasons. One is that states are usually mandated by their constitutions to spend only what they raise in revenue. Another is that some vital programs will have funding that was cut for budgeting purposes restored in next year's budget.

But with the good news comes the need for fiscal caution:

While economic forecasts are fairly rosy, another downturn would quickly put states back into tight budgets.

Just because more money is starting to flow into state coffers is no reason to go on a spending spree.

Look at the cause of the budget crunches most states have recently faced. After a decade of strong economic growth, revenue in most states grew substantially. But so did spending. New and costly programs that gobbled up the increased revenue suddenly were unaffordable with the economy soured.

To balance their budgets, most states wisely relied on spending cuts rather than increasing taxes to keep up with the spending levels during the good times. Now that revenue is going back up, legislatures should be extremely cautious about restoring full funding for any program that isn't absolutely essential.

The hard times aren't over for state government. Let's hope legislators and governors have learned a prudent lesson.