Budget and Spending

The issue the Supreme Court will decide in McDonough v. Smith is whether the statute of limitations for a due process fabrication of evidence claim begins to run when the criminal proceedings terminate in the defendant’s favor, or when the defendant becomes aware of the tainted evidence and its improper use.

Edward McDonough, former Democratic Commissioner of Rensselaer County Board of Elections, approved forged absentee ballot applications which he claims he didn’t know had been falsified. Youel Smith investigated and prosecuted McDonough. McDonough claims Smith “engaged in an elaborate scheme to frame McDonough for the crimes by, among other things, fabricating evidence.” After two trials, McDonough was ultimately acquitted.

Just before three years passed since McDonough was acquitted he sued Smith under Section 1983 for violating his due process rights by fabricating evidence and using it against him. Section 1983 allows citizens to sue state and local government officials in federal court for constitutional violations.

CSG Midwest
State fiscal conditions were the focus of several recent national studies — here are some of the key findings for the Midwest.

A recent report by the U.S. Fish and Wildlife Service shows the continued decline in the number of Americans who hunt. Currently, only about 5 percent of people 16 and over hunt, whereas it was nearly double that five decades ago. Less people acquiring a hunting license has created funding problems for state conservation programs,...

The Council of State Governments will release a new report, "Diabetes in the United States: Examining Growth Trends, State Funding Sources and Economic Impact", on state spending for diabetes at the 2017 CSG National Conference in Las Vegas on Dec. 15. Click here for press release. 

CSG, with assistance from the National Association of Chronic Disease Directors, surveyed all 50 states to discover how many states...

How do states develop and manage their budgets, and how does this process vary across states? The latest edition of NASBO’s Budget Processes in the States report provides self-reported data from all 50 states and the District of Columbia on many aspects of state budget practices, such as: the budget calendar, revenue forecasting, gubernatorial budget authority, balanced budget requirements, tax and expenditure limitations, debt restrictions, approaches to budget development, rainy day funds, tools to monitor and control expenditures, and the use of performance measures.

Overall, state fiscal conditions weakened in fiscal year 2016 compared to the prior year. Both revenue growth and total state spending experienced a slowdown due to numerous factors. In addition, the number of states making mid-year budget cuts was historically high outside of a recessionary period. In fiscal 2017, it is projected that both state general fund spending and revenue will grow moderately. However, since the start of the fiscal year, over half the states have had to revise their revenue projections downward due to weaker-than-anticipated tax collections. Looking forward, states are not only contending with slow revenue growth and constrained spending, but also federal uncertainty in a number of areas.

The president's federal budget was released May 23 and the analysis of winners and losers began practically before the ink was dry, although almost all of Washington seemed to agree the budget was dead on arrival. Cuts to the Medicaid and Children's Health Insurance Program, or CHIP, alone total $616 billion over the next ten years. The budget also envisions saving $250 billion from partly repealing and replacing the 2010 health care law. Taken together, these Medicaid cuts are nearly half the nondefense discretionary funding cuts. To further understand just how important federal Medicaid funds are to states, CSG looked at 2017 federal funding flowing to the states. According to Federal Funds Information for the States, or FFIS, data, the federal Medicaid funding for 2017 is more than 50 percent of all federal grant funds flowing to states in all but four states.

Overall, state fiscal conditions showed modest improvements in fiscal year 2015. Revenue growth accelerated, mostly due to strong income tax collections, while total state spending from all fund sources increased at its fastest rate since 1992 due to additional federal funds from the Affordable Care Act. In addition, the number of states making mid-year budget cuts remained low, and states’ total balances reached an all-time high in actual dollar terms. In fiscal 2016, states expect both revenue and spending to grow slowly. However, some states are facing significant budgetary challenges associated with the decline in oil prices. It is likely that budget proposals for fiscal 2017 and beyond will remain mostly cautious with limited spending growth.

State and local governments have been reshaping their finances since the Great Recession. They have been struggling with three major sources of fiscal stress: slow tax revenue growth, growth in pension contributions that has been heavily concentrated in a few states, and Medicaid spending growth driven by recession-related enrollment. In 37 states, pension contributions plus state-funded Medicaid grew by more than state and local government tax revenue between 2007 and 2014, in real per-capita terms. In response to these strains, state and local governments have cut infrastructure investment, slashed support for higher education, cut spending on K–12 education, cut spending on social benefits other than Medicaid, reduced administrative staff and reduced most other areas of the budget.

According to the National Association of State Budget Officers, most states (46) will start their fiscal year on January 1, 2016. Most states (39) have enacted their budgets for the new fiscal year, including 16 states that operate on a biennial budget and who passed their fiscal year 2017 budgets last year. That leaves 11 states that have yet to enact a budget for 2017: Alaska, California, Delaware, Illinois, Louisiana, Massachusetts, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.

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