Top 5 in 2016

For states in the coming year, no news is good news when it comes to finances. For the last few years, states on the whole have seen a slow and steady increase in revenues. In the coming year, state leaders will have a little bit more breathing room when making fiscal decisions. States collected $912 billion in total tax revenues in fiscal year 2015—an increase of 5.6 percent over 2014 levels. Growth over this time was widespread—47 states reported growth—while three states, Alaska, Illinois and North Dakota, reported declines. For states reliant on natural resources, that cautious revenue growth could be derailed by volatility in the oil market.

Federal Instability Trickles Down: As the federal appropriations process remains largely dysfunctional, that volatility and instability will continue to affect states negatively. Federal dollars made up 30 percent of state revenue in fiscal year 2013—a decline after reaching a peak of 35.5 percent in fiscal 2010 after the Great Recession. However, Congress has not approved all 12 appropriations bills on time since 1996, and it has relied on the use of stopgap continuing resolutions, also known as CRs, and omnibus bills to provide federal appropriations. That causes significant uncertainty, making it difficult for state and local governments to manage fiscal resources and strategically plan.

Public Pensions Remain a Priority: Public pensions will continue to be a major area of concern for many states as accounting requirements and the financial assumptions used to calculate how much a state must pay into their systems transition. State-run retirement systems had a $968 billion shortfall in 2013, but recent strong investment returns, new accounting standards and state reforms have led to a reduction in unfunded liability for a majority of states. However, shortfalls are expected to remain between $800 and $900 billion in 2016, which means pensions will remain a big fiscal concern for state leaders in the coming year.

CSG Director of Education Policy Elizabeth Whitehouse and Senior Policy Advisor Jeff Stockdale outline the top five issues in education policy for 2016, including college access and affordability, Elementary and Secondary Education Act reauthorization, WIOA implementation, and student veterans. 

With the passage of the FAST Act by Congress in late 2015, states have some of the long-term certainty they have long sought in the federal transportation program. But can a mostly status quo, five-year transportation bill help states make up for years of inadequate investment in the nation's infrastructure. More than likely, more than a few will still feel compelled to follow in the footsteps of eight states that raised gas taxes in 2015. Some may also turn to tolling and public-private partnerships to help fund projects, although those tools in the toolbox have seen increasing scrutiny and criticism in some parts of the country. State officials face a variety of other challenges as well including how to plan for the technological and demographic changes that could radically alter the transportation landscape in the years ahead and how to deploy and enhance the kinds of transportation options that will make communities into livable, sustainable, economically vital places. Here are my top five transportation issues for 2016 along with more than 500 links to resources from CSG and a variety of other sources where you can read more.

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