The rise of internet sales and electronic commerce over the past fifteen years has prompted states and Congress to reconsider the issue of remote sales tax collection. After years of inaction on the issue, Congress now has three similar, though importantly distinct legislative proposals under consideration in both the House and Senate that would require out-of-state retailers to collect and remit sales taxes.

The state and local government bond markets have held up well throughout the year despite a few high profile municipal defaults or bankruptcies by local governments. The forecasts from some commentators in 2010 and earlier this year predicting a municipal bond crisis have not come to fruition, and a collapse of the municipal debt markets is not likely to arise anytime soon.

Funding ongoing Medicaid programs is one of the greatest challenges for states. In governors’ proposed budgets for fiscal 2012, cost containment in Medicaid is a dominant theme. Medicaid spending is estimated at $354 billion in fiscal 2010, according to NASBO’s 2009 State Expenditure Report. As a result, Medicaid surpassed elementary and secondary education as the largest component of total state spending for the first time since 2006 based on estimated fi scal 2010 spending data.