Restoring a Delicate Balance

After a bath in red ink, some state budgets begin to recover

In the trough of the national recession a year ago, state and local governments were all but drowning in a $1.9 billion pool of red ink. But now there is cause for cautious optimism. According to a survey by Morgan Guaranty Trust Co. of New York, states and localities may finish 1983 with a combined operating surplus of $16.1 billion.

The current economic recovery, which has boosted revenues through increased income and retail sales, deserves considerable credit for the rosier outlook. Just as...

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