Governors are releasing their budget proposals for fiscal year 2015, which for most states will begin on July 1, 2014. Seventeen states previously enacted two-year budgets covering both fiscal years 2014 and 2015. The National Association of State Budget Officers has compiled a comprehensive list of links to proposed and previously enacted budgets for states and territories - check it out here: National Association of State Budget Officers.

Jennifer Burnett, CSG Program Manager, Fiscal and Economic Development Policy, outlines the top five issues for 2014 related to fiscal and economic development policy, including pervasive federal instability, a sluggish recovery, soaring health care costs, a stagnant labor market and new demands on state resources for economic development.

Despite the high drama surrounding the current federal government shutdown and debt ceiling negotiations, a recent credit.com poll showed that about 30 percent of Amercians are not really concerned about any fallout affecting their personal lives.

Moody’s outlook at the state level has been negative for five years; however, on August 20, 2013 Moody’s Investors Services has revised its outlook for US states to stable from negative. Moody’s outlook on US states primarily reflects their view of the slowly improving US economy and monetary system, as well as the U.S. dollar’s status as the world’s key reserve currency.

Stateline Midwest ~ 2013 MLC Annual Meeting Edition

States are back to pre-recession spending levels, rainy-day funds and other reserves are being replenished, and multiple years of cutbacks in state and local government workforces have come to an end.
These trends, Scott Pattison said during a meeting of the Midwest’s fiscal leaders, are all signs that states have weathered one of the most trying budget periods in generations.
“We’re in a slow, slog [economic] recovery,” he said during a presentation at the Midwestern Legislative Conference Annual Meeting.
The slowness of that recovery is one reason he suggested caution to the region’s state legislators as they set fiscal agendas in the years ahead.

On June 20-22, 45 CSG members gathered in Washington, D.C. for the second annual Medicaid Policy Academy to learn more about Medicaid and how states can improve health outcomes for enrollees and, at the same time, run a more cost efficient program. Attendees had been nominated for attendance by health committee chairs in their home states as "rising stars" who were either new to positions of leadership on Medicaid policy or were likely to soon assume these positions.

The State Budget Crisis Task Force, established by Richard Ravitch and Paul Volcker, examined major threats to state fiscal sustainability, including federal deficit reduction, underfunded retirement promises, rapid Medicaid growth, and narrow and eroding tax bases. It recommended better federal-state communication, improved state budgeting and reporting practices, and broader state tax bases.
 
States experienced their second consecutive year of positive but slow growth in the 2012 fiscal year. Both revenue collections and spending from state funds increased, although at growth levels below the previous year. Additionally, the number of states making mid-year budget cuts continued to decline in 2012 and states have begun to replenish their rainy day funds and reserves. In the 2013 fiscal year, states are expected to continue their improvement, with both state revenues and state spending projected to grow. Revenue growth since the recession, however, remains weak by historical standards and general fund spending is expected to remain below peak levels. States are expected to face tight fiscal conditions for a number of years to come due to federal uncertainty, the slow pace of economic growth and increased spending demands.
 
Standard & Poor’s Ratings Services has public ratings on all 50 states and certain U.S. territories based on an analysis of a range of factors as outlined in its U.S. State Ratings Methodology. In addition to the ratings provided on general obligation bonds or ratings linked to the general credit rating of a state, such as appropriation secured bonds, hundreds of other state tax and revenue-supported obligations are rated. Similar to the broader municipal bond market, the range of bond security types issued by states is very diverse and runs the gamut of sales tax, gas tax, hotel tax, income tax, lottery revenue, liquor profits, and insurance premium assessments. The diversity of issuance in the state sector reflects the broad service and infrastructure responsibilities each state is responsible for funding.
 
Fiscal and economic recovery remains slow and painful for many states, as revenues struggle to get back to pre-recession levels while upward pressures on spending remain. Decreasing and increasingly unpredictable federal spending has put additional pressures on states, especially in the areas of health care and education. Labor trends have improved, but the severity of the recession has left its mark—long-term unemployment rates continue to be elevated, while labor participation rates hit their lowest levels in thirty years.
 

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