NASBO Fall Report: State Fiscal Conditions Continue to Improve

According to the National Association of State Budget Officers’ Fall 2013 edition of the Fiscal Survey of States, as the national economy moves sluggishly toward recovery, state revenues will continue their slow but steady climb in fiscal 2014. State revenues started to collectively rebound in 2012 and 2013, while rainy day fund balances were being restored; that should continue in 2014. Spending and revenues in fiscal 2014 are projected to rise above 2013 levels, although revenue growth rates could soften compared to year: revenues increased by 5.7 percent in fiscal 2013, while states project revenues to rise by only 0.8 percent in fiscal 2014.

According to the NASBO report, this potential softening in revenue collections could pose budgetary pressures for states in areas directly impacted by sluggish growth in the economy such as health care, higher education, and aid to local governments. In addition, volatility in D.C. coupled with the effects of sequestration could further dampen revenue growth in 2014.

NASBO also reported in its recent State Expenditure Report that in fiscal year 2012 general fund spending increased 3.7 percent while spending from state funds (general funds and other state funds combined) rose 2.2 percent. However, federal funds to states declined 9.1 percent as the bulk of the Recovery Act spending ended, which led to a 1.7 percent reduction in total state expenditures - the first nominal decline in total state expenditures in the 26-year history of the . While total state expenditures declined in fiscal 2012, NASBO estimates that expenditures will return to more typical growth levels in fiscal 2013.

In fiscal 2013, Medicaid is once again the largest category of total spending (all state and federal funds combined) - representing 23.9 percent of toal state expenditures - while spending on K-12 education is the largest spending category for state-only funds.

 

 

 

 

 

 

 

 

 

 

State fiscal conditions are modestly improving in fiscal 2014 with spending and revenues projected to rise above fiscal 2013 levels. Signs of fiscal distress continue to subside, and most states expect revenue and spending growth in fiscal 2014. Tax collections outperformed projections in fiscal 2013, and revenues experienced steady gains in most states. Although revenues are expected to increase in fiscal 2014, states are not projecting a rise in tax collections comparable to the gains in fiscal 2013. Revenues increased by 5.7 percent in fiscal 2013, while states project revenues to rise by only 0.8 percent in fiscal 2014. This potential softening in revenue collections may pose budgetary pressures for states in areas directly impacted by sluggish growth in the economy such as health care, higher education, and aid to local governments. Fiscal challenges from the modest economic recovery are likely to linger, but these setbacks are not expected to cause significant budget volatility for states in fiscal 2014. Overall, state fiscal trends indicate continued modest growth and stability. - See more at: http://www.nasbo.org/publications-data/fiscal-survey-states/fiscal-surve...
State fiscal conditions are modestly improving in fiscal 2014 with spending and revenues projected to rise above fiscal 2013 levels. Signs of fiscal distress continue to subside, and most states expect revenue and spending growth in fiscal 2014. Tax collections outperformed projections in fiscal 2013, and revenues experienced steady gains in most states. Although revenues are expected to increase in fiscal 2014, states are not projecting a rise in tax collections comparable to the gains in fiscal 2013. Revenues increased by 5.7 percent in fiscal 2013, while states project revenues to rise by only 0.8 percent in fiscal 2014. This potential softening in revenue collections may pose budgetary pressures for states in areas directly impacted by sluggish growth in the economy such as health care, higher education, and aid to local governments. Fiscal challenges from the modest economic recovery are likely to linger, but these setbacks are not expected to cause significant budget volatility for states in fiscal 2014. Overall, state fiscal trends indicate continued modest growth and stability. - See more at: http://www.nasbo.org/publications-data/fiscal-survey-states/fiscal-surve...
Tags: