State Budget Headline Watch 2017

In the coming months, legislators in almost every state will be grappling with writing a new budget. According to the National Association of State Budget Officers (NASBO), 47 states will enact a new budget for fiscal year 2018, while the three remaining states (Kentucky, Virginia and Wyoming) have previously enacted budgets that cover both fiscal years 2017 and 2018. Among those 47 states, most – 30 – will pass an annual budget, while 17 will authorize a two-year (biennial) budget that will cover both fiscal year 2018 and 2019. Note that for 46 states, fiscal year 2018 will begin on July 1, 2017. Alabama (Oct. 1), Michigan (Oct. 1), New York (Apr. 1) and Texas (Sept. 1) are the exceptions.  Most state legislatures adopt their new budgets in the spring.  


STATE BUDGET AND FISCAL HEALTH HEADLINES


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Alabama            

Early Alabama budget reform report expected next month

“The legislators – charged with finding solutions to annual shortfalls in the state’s General Fund budget – will deliver a preliminary report next month. Members have expressed interest in extending the committee's work beyond that date. Wednesday’s meeting tried to put together a landscape of revenues and expenditures in the state that could lead legislators to specific areas of change.”

“To solve the problem we’re talking about we have to do to understand the problem,” said Sen. Clyde Chambliss, R-Prattville, a co-chair of the committee. “Where have we been, what are the issues – not just for one or two years, but going back 50 years.”

Capital notebook: Shortfall in General Fund expected in 2018

“The state’s budget outlook in 2018 will be the same song in a different year, new Alabama Finance Director Clinton Carter said at the Statehouse last week. Carter said predictions aren’t final yet, but growth is expected in the state’s education budget thanks to sales and income taxes, the two largest revenue streams flowing into that budget. This year’s education budget was about $6.8 billion.”


Alaska  

Walker proposes tripling gasoline tax to take a bite out of Alaska budget deficit

“Alaska's budget deficit would be $2.78 billion if the Legislature approves Walker's proposed budget cuts but doesn't enact any new revenue.” 


 Arizona

Getting down to business

“For a 60-day period beginning Jan. 17, state lawmakers will attempt to steer their constituents toward prosperity while grappling with a $300 million deficit for the coming fiscal year and another $69 million projected budget deficit still to be dealt with in the current fiscal year.”


Arkansas            

State revenue up by $7.6M in December

“Joint Budget Committee co-chairman, Sen. Larry Teague, D-Nashville, said the general consensus of state and legislative experts is that the state will meet its general revenue forecast for fiscal 2017. December is the sixth month in fiscal 2017, which ends June 30.” 


 California           

California voters just approved more taxes, but the new state budget could still be lean on cash        

 “On Thursday, the independent Legislative Analyst’s Office reported that preliminary tax collections in December — a key month for quarterly tax payments — were almost $1.2 billion below predictions. The state Department of Finance, which doesn’t release its December analysis until next week, has reported several months of anemic tax collections in comparison to the assumptions built in to the foundation of the California budget that Brown signed into law in June.

The absence of hundreds of millions of dollars in expected tax revenues — whether Brown will go so far as to call it an actual deficit remains to be seen — could only sharpen the annual haggling between the governor and legislative leaders over revenue projections, a negotiation that has routinely left Brown with the upper hand.” 


Colorado            

General Assembly Convenes With Pot, Gambling And A Budget Deficit On The Agenda  

“The state budget, and how to close a projected deficit of at least $1.4 billion, will drive much of the session, which is scheduled to last through June 7.”


Connecticut        

Governor Malloy gives annual State of the State address focusing on budget deficit

“Governor Dannel Malloy delivered the 2017 State of the State address on Wednesday. His main focus was on the state budget, which has roughly a $1.3 billion deficit.”


Delaware            

Delaware faces $350 million budget         

“The Delaware Economic and Financial Advisory Council, a panel of state officials and economists, projected Monday that state government revenues for the 2017-2018 fiscal year will about $200 million less than the current 2016-2017 fiscal year. On top of that, the cost of government is set to grow by about $150 million, bringing the total gap to about $350 million.”


Florida 

Austerity budget looms despite Florida’s improved state revenue forecast

“The Florida Legislature may have nearly $142 million more to spend next year than previously expected, but that won’t save lawmakers from difficult choices during the spring legislative session. The revenue forecast for the fiscal year ending in June could run $119.3 million ahead of the previous forecast in September, according to preliminary numbers approved Monday by Florida’s Revenue Estimating Conference. The conference estimated that revenues would run $22.6 million ahead of earlier forecasts during the 2017-18 fiscal year, beginning July 1."


Georgia              

Georgia Legislature heads into session of uncertainty

“Despite rising state tax collections and a relatively strong economy in Georgia, Deal has already made it clear to key lawmakers that he will set a conservative estimate for spending growth in fiscal 2018, which begins July 1. Growth will likely be limited to about 4 percent or less, and most state agencies were told not to ask for anything extra. The governor has his reasons. He has generally set low-ball estimates for tax revenue, preferring to be on the low side and sock away big surpluses when the economy outperforms his projections.”


Hawaii  

Ige’s Wish List: More Money For Schools, Housing, Homelessness

“All told, the proposed operating budget totals $14.2 billion for fiscal year 2018 (an increase of 4 percent), which begins July 1, and $14.3 billion (an increase of 5 percent) for fiscal year 2019….She noted that Ige’s current budget is $170 million over the amount that is expected to be brought into state coffers.”


Idaho   

Idaho Legislative Update - January 2017

“Tax revenues continue to be strong for the State, and with the budget surplus mounting, legislators will have to decide whether to boost funding for programs such as education and transportation, explore tax-cuts, or put money away into a rainy-day fund to hedge against a future downturn.” 


Illinois  

Key Numbers in Illinois' Budget Stalemate

“As the Illinois Senate tries to broker a deal to break the state's long-running budget deadlock, here are some of the numbers at the center of the debate…$5.3 billion: The estimated budget deficit on June 30 if nothing changes, according to the Governor's Office of Management and Budget.” 


Indiana

Indiana budget leaders cautious despite optimistic state revenue forecast

“For the next budget year, the revenue forecast predicts Indiana will collect $436.6 million more than this year's reduced total, an increase of 2.9 percent. Revenue should grow by $608.7 million, or 3.9 percent, between July 2018 and June 2019, according to the forecast created by a bipartisan committee of budget experts drawn from both the legislative and executive branches of state government.”


Iowa     

State faces potential budget shortfall

“The latest projections for the state general fund budget prepared by the nonpartisan Legislative Services Agency estimates a $35.6 million shortfall for the current fiscal year that ends June 30 and a $63.1 million shortfall for the fiscal 2018 state budget that Gov. Terry Branstad and the GOP-led Legislature will shape into a final spending plan next session.”


Kansas 

State budget director seeks ‘bridge’ across current-year budget shortfall, senators say

“Kansas faces a budget shortfall in the current fiscal year of more than $340 million. The administration will release details on its plan to balance the budget later this week.”


Kentucky           

FY2017-FY2018 enacted


Louisiana           

Louisiana mid-year budget cuts likely to exceed $600 million

“Despite raising more than $1.5 billion in taxes last spring and cutting the popular TOPS college scholarship program, Louisiana still must cut more than $600 million from its budget over the next two months. The budget cycle ended June 30 with a $313 million deficit that must be covered by July 1, 2017, and state taxes aren't bringing in nearly as much money as projected. Economists estimate an additional shortfall of more than $300 million due to low tax revenue.”


Maine

LePage budget would cut 500 state jobs, shift Maine to flat tax by 2020

"Gov. Paul LePage’s $6.8 billion, two-year state budget proposal, released Friday night, would reduce Maine’s state employee workforce by about 500 and shift Maine to a flat income tax by 2020."


Maryland           

Maryland lawmakers face budget gap, political warfare in new session       

“With state revenue falling short of projections, Republican Gov. Larry Hogan and leading Democrats in the legislature must agree on $544 million worth of spending cuts for the next year — 3 percent of the state's $17.2 billion general fund. Those tough budget decisions will take place amid a potentially toxic political climate.”


Massachusetts 

Mass. budget shortfall pegged at $294M

“A top official in Republican Gov. Charlie Baker's administration said Friday that the state's budget appears to be nearly $300 million out of balance, an announcement likely to trigger spending cuts and a reduction in the state's workforce.”


Michigan

Analysis: Tax cut push comes as state budget projected to tighten

“Incoming state budget director Al Pscholka predicted a minimum $700 million squeeze in 2018-19 on the general fund, which predominantly helps fund social welfare programs, prisons and universities and is also used to draw additional dollars from the federal government. He declined to comment much about calls for tax relief, saying, "I know we're looking forward to having that discussion with the Legislature."


 

Minnesota         

OMMB: State budget outlook stable

“The Office of Minnesota Management and Budget’s November economic forecast shows a $1.4 billion overall surplus heading into the next fiscal year. The office reported for the current budget cycle, $334 million of this biennium’s balance will automatically go into the state budget reserve leaving $678 million in surplus, and a $1.4 billion overall surplus.”


Mississippi         

Mississippi legislative session: What will 2017 bring?

“The 2017 session, which begins Tuesday and is scheduled to run through April 2, promises similar budgetary issues, with revenue growth expected to be minuscule or flat. Initial proposals by the legislative budget committee and Gov. Phil Bryant propose more cuts for most agencies....individual income tax collections have been falling short of projections, an issue likely to cause a $65 million to $70 million gap.”


Missouri             

Welcome to the governor’s office — Eric Greitens could face big Missouri budget shortfall

“Fitzpatrick puts the budget shortfall that Greitens could inherit at $200 million. Traci Gleason, director of communications at the liberal think tank Missouri Budget Project, says it’s more likely closer to $300 million.” 


Montana            

Forecasts predict strengthening Montana economy, revenues

“The forecasts, while good news, don't change the fact that the money the state now has in its treasury is a lot less than what budget writers had planned, said Sen. Fred Thomas, R-Stevensville, who is the chairman of the Senate Revenue and Transportation Interim Committee. That means Republican legislative leaders will approach the next two-year state budget as though Montana is in a deficit. ‘We're still anticipating that the revenues will be under the expected expenditures under the next biennium, that's why the governor's proposing tax increases,’ Thomas said.”


Nebraska           

Facing a $900 million budget shortfall, Nebraska lawmakers must decide where to squeeze

“Lawmakers convening Wednesday are faced with a nearly $900 million shortfall, a gap some say could be closed through spending cuts alone. Others believe a combination of efforts would help to balance the books.”


Nevada

Bill requests give peek at Nevada governor’s agenda ahead of State of the State

“The Economic Forum, an independent panel of fiscal experts who project state revenue, last month forecast Nevada will collect $7.9 billion in general fund tax revenue for the 2018-2019 fiscal years, a 7 percent increase over the current $7.3 billion budget. The revenue forecast is $300 million to $600 million less than the total budget requests state departments submitted to Sandoval in October. Agencies requested $8.2 billion, a total that included possible 5 percent cuts. Without reductions, agency spending requests totaled $8.5 billion.”


New Hampshire              

N.H. Finances Appear in Good Shape as State Budget Process Begins

“State financial experts say New Hampshire is starting the year off in better fiscal health than expected. That’s good news for lawmakers charged with crafting the next two-year state budget. When budget writers wrote up the current state spending plan, they projected the state would start 2017 with a $33 million surplus. But according to this month’s estimates, the actual surplus is nearly 3 times that amount.”


New Jersey

Low-key N.J. budget plan expected from Christie

"I think the budget will probably be a couple of Band-Aids in order to keep the dike from bursting before he gets out of office in January of 2018," Murray said. "I think it will probably be driven by the Democrats in the Legislature in terms of, if there is any major policy change or shifts, it will come from them."


New Mexico      

More budget cuts loom for New Mexico

“New Mexico faces the prospect of more budget cuts and painful belt-tightening in the upcoming 60-day legislative session as new state revenue estimates unveiled Monday show the state is on track to have a deficit of about $69 million for the current fiscal budget year even if all cash reserves are spent. In addition, the revenue projected to be available for the fiscal year starting in July 2017 – slightly more than $5.9 billion – is nearly $300 million less than original state spending levels for this year.”


New York           

Report on the State Fiscal Year 2016-17 Enacted Budget Financial Plan and Capital Program and Financing Plan   

“Based on the Division of the Budget’s projections of disbursements and receipts in coming years, my office estimates that the State faces potential budget gaps averaging nearly $5 billion annually over the three fiscal years starting in 2017- 18 – substantially more than projected in this year’s Executive Budget.”


North Carolina

NC Budget Director Reports $425 Million Surplus

“The NC Budget Director says the state’s economy is humming after reporting a major surplus in the state budget. The announcement was made at the Council of State meeting in Raleigh Tuesday morning, when Budget Director Andrew Heath said the budget surplus stands at $425 million. He added that’s significantly more than the surplus projected when Governor Pat McCrory released his budget earlier this year.”


North Dakota    

Proposed North Dakota budget forecast shows nearly $2 billion drop in general fund revenues

“The House and Senate appropriations committees heard proposals Wednesday, Jan. 4, for a new legislative forecast for the coming two-year budget cycle that includes nearly $1.9 billion less in general fund revenues than what's projected for the 2015-17 biennium, which ends June 30. The proposed forecast, presented by Legislative Council staff, includes almost $3.7 billion in general fund revenues for the 2017-19 biennium, down about 34 percent from the more than $5.5 billion projected for the current biennium.”


Ohio     

Ohioans would be affected in many ways by state budget belt-tightening   

“After several years of budget stability, Ohio’s finances are expected to be strained this year amid predictions of recession economics and tight spending.”


Oklahoma          

New state legislators sworn in, ready for 2017 session

“Apprehension hangs over the 2017 session, which begins Feb. 6, for the same reason 2016 and 2015 were dispiriting for lawmakers: the budget. There is some good news, if comparisons are applied. The unfunded portion of the 2018 budget is expected to be $869 million - 12.6 percent less than the shortfall for 2017. Preston Doerflinger, state finance secretary, released figures in December. The Oklahoma State Board of Equalization certified a $6 billion budget. Allocations for the current fiscal year are $6.8 billion.”


Oregon

Full text: Gov. Kate Brown's inaugural speech touts achievements, urges tax, pension reforms           

“Brown is using the occasion, coming days before the start of the 2017 legislative session, to lay out plans for pushing priorities such as expanded health care for children while also finding ways to solve a $1.7 billion budget deficit expected to raise partisan tensions.”


Pennsylvania    

Wolf says he's ready for fiscal, political challenges

“The state's independent fiscal office predicts a budget deficit in the current fiscal year of more than $500 million, and a shortfall in the coming budget year of as much as $1.7 billion.”


Rhode Island     

RI facing $112M budget deficit next year

“Rhode Island’s tax revenue is on the rise, but not by nearly enough to offset the red ink looming in the next state budget. The House Fiscal Office said Tuesday it estimates the state is facing a deficit of about $112 million in the 2017-18 fiscal year. The deficit forecast had been even higher last summer – when it was roughly $185 million – but was recently lowered thanks to rising revenue and unexpectedly large surpluses this year and last year.”


South Carolina

BRIEFS: Overlooking Haley’s new budget; Pension reform looms

“A cursory review of Haley’s $7.8 billion budget shows it’s similar to budgets of recent years… Statehouse observers say a lot of Haley’s budget, such as the zeal for tax cuts, may be ignored because lawmakers simply are strapped with existing obligations,  but only have $319 million in new tax revenues to meet needs. According to a 2017-18 budget outlook by the state Revenue and Fiscal Affairs Office, there’s little flexibility despite more money due to funding needs that total $331 million…”


South Dakota   

Lackluster finances, ethics initiative await state lawmakers

“Lawmakers aren’t starting the session with gobs of cash to throw around. Daugaard offered a budget plan in December constrained by lower-than-expected tax collections, forcing officials to address a shortfall this year and rein in new spending for the next budget year. The governor has cautioned since that even the modest increases he’s proposed may need to be pared.”


Tennessee         

6 issues to watch as state lawmakers return to Nashville

“For the second year in a row, the state has a massive budget surplus thanks to hundreds of millions in extra tax revenue. This year, the surplus in tax collections that can be spent on a one-time basis is $1 billion, with the surplus ballooning to nearly $2 billion when recurring money is added.”


Texas    

State budget announced before start of 85th legislature

“Economists are predicting the state is going to close its current two-year budget with a surplus of around $2 billion, which may sound like a lot. But in comparison, the state had an $8 billion surplus at the start of the 2015 legislative session. The number was originally predicted to be about $4.5 billion, but sinking oil prices have slashed the surplus by driving down production tax collections by 50 percent in fiscal year 2016. Advanced planning well ahead of each budget year is key to keeping the state from sinking into a deficit when things like this happen.”


Utah     

Herbert's 2018 Budget Proposal is 6.2% Larger than Last Year (Updated)

“While the state’s economy is still doing very well, tax revenue growth is slowing down – especially when compared to the last two fiscal years. For example, Herbert’s new budget shows only an $80 million surplus in one-time monies for the current budget year and new, ongoing tax growth of just over $287 million next fiscal year. That $287 million in “new” money compares to $668 million in “new” revenue growth with which lawmakers ended their budget-setting in the 2016 general session, the Legislature’s website shows.”


Vermont            

Phil Scott stares down $50M budget gap

“Scott and lawmakers are expected to face a budget hole of about $55-75 million for the coming year, the Legislature's fiscal analysts said Wednesday. Administration officials peg the gap at about $40-50 million. Both groups are uncertain about the future of federal funds under the new presidential administration.”


Virginia

FY2017-FY2018 enacted


Washington      

State Budget Deficit Estimates Jump Higher

“The budget stakes have risen for Washington lawmakers. A report last week from the Office of Program Research states the expected budget deficit for the 2017-19 biennium will now be almost $1.5 billion (p. 7), up from the previous estimate of $89 million. Additionally, a House Appropriations Committee summary also released last week now shows the expected shortfall for the 2019-21 budget is $7.4 billion. That’s sharply higher than the $2.6 billion projected recently in a report from Senate Ways and Means Committee staff.”


West Virginia    

WV revenue shortfall for 2017 nears $100M

“The State of West Virginia's budget shortfall swelled again in December as the state came up $6.7 million short of its projected revenue for the month, Revenue Secretary Bob Kiss reported Monday. Kiss said the state's General Revenue Fund had fallen $98.2 million behind state officials' projections since Fiscal Year 2017 began on July 1, 2016. That means the state had fallen behind by a margin of more than $11 million since November, when the General Revenue Fund was $87 million short of its projected revenue to that point, Kiss said. The revenue gap applies to the current budget year, but the outlook isn't much better going forward. Kiss said last month that legislators would have to patch an estimated $400 million hole in Fiscal Year 2018, which will begin July 1, 2017.” 


Wisconsin          

A Look Ahead at the Upcoming Budget Debate

“As Wisconsin prepares to begin the next budget cycle, the state's finances are in solid shape. While taxes have been cut repeatedly, state revenues grew 4 percent from fiscal year 2015 to FY16, a jump from $9.49 billion to $9.87 billion. Overall revenues are projected to continue growing by about 3 percent annually over the next biennium with a modest economic growth projection of 2.2 percent per year.” 


Wyoming           

FY2017-FY2018 enacted               

 

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