Book of the States 2011

Chapter 8 of the 2011 Book of the States contains the following articles and tables:

The 2010 fiscal year was another difficult year for states. State revenue collections continued to fall, while general fund spending declined for the second year in a row, marking the first time state spending has declined in back-to-back years. Additionally, 39 states were forced to make midyear budget cuts. Fiscal conditions have improved somewhat for states thus far in the 2011 fiscal year. The number of states making budget cuts has declined and both revenue collections and spending have grown. However, states remain well below pre-recession levels even with the recent increases. States will have to continue to make difficult decisions in the 2012 fiscal year and beyond as Recovery Act funds wind down, spending demands remain high and revenues are slow to recover.

Like most states, Alabama is currently facing the crisis of an overcrowded prison population and a recidivism rate that significantly threatens public safety and exacerbates already bleak state and local government budget shortfalls. Rather than continue to spend vast sums of money on a system that is clearly broken, Alabama is beginning the process of interbranch cooperation to implement effective reforms in the areas of sentencing and corrections at the state and local levels. A number of efforts are currently underway. For the sake of public safety and stark financial reality, Alabama must continue to modify its laws and carry out reforms to lower the costly burden of corrections and stop the revolving door of recidivism.

Medicaid, the largest health insurance program in the nation, is jointly financed by state and federal governments. The federal government establishes matching rates for each state each year, setting the percentage of overall costs paid by the federal government—between 50 and 83 percent—based on a state’s per capita income compared to the nation’s per capita income. The American Recovery and Reinvestment Act of 2009 provided all states with enhanced matching rates for their Medicaid programs in recognition of the fiscal issues states faced in the Great Recession.

State treasurers provide professional financial management and accountability for a variety of public funds. These include general operating funds and special funds such as unclaimed property programs. They also borrow money through the municipal debt market to finance state projects.