The report, "Sector Economic And Credit Conditions Forecast: U.S. State And Local Governments To See Gradual But Uneven Revenue Improvement," notes that Standard and Poor's forecast for states is stronger than for local governments. This is because the former is more dependent upon income taxes while the latter is more dependent on property taxes, which have not yet recovered from the drops of the past four years.
The report discusses Standard and Poor's three forecasts - the baseline, optimistic, and pessimistic - and the repercussions of each for the sector.
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