Federal Issues

 

Information on federal legislation, mandates, programs, executive orders, and other actions that impact state finance. In fiscal year 2011, federal funds represented 34 percent of total state expenditures, although this percentage is likely to decline following the wind down of the funding provided through the Recovery Act. The possibility of future federal budget cuts combined with likely congressional changes to healthcare, K-12 education, tax policy, and other areas, has led to a significant level of uncertainty among state decision-makers.

Staff Contact: Kathryn Vesey White

NASBO Publications

  • This report shows that state fiscal conditions are moderately improving in fiscal 2015 as the economic recovery enters its sixth year. Consistent annual growth in the economy, while not as robust as many would like, is leading most states back to budget growth. States have replenished some spending for areas cut back during the recession, such as K-12 education and higher education. In addition to bolstering state spending, economic growth has produced higher revenue collections.
  • The latest edition of NASBO’s State Expenditure Report finds that total state spending in fiscal 2014 is estimated to have grown at its fastest pace since before the recession, largely due to an increase in federal Medicaid funds as a majority of states chose to expand enrollment under the Affordable Care Act. Total state spending growth in fiscal 2013 was more modest; however, total state expenditure did return to positive growth following declines in fiscal 2012.
  • State budgets are expected to continue their trend of moderate growth in fiscal 2015 according to governors’ spending proposals. Consistent year-over-year growth has helped states achieve relative budget stability, but progress remains slow for many states. With each passing year of slow improvement, more and more states are moving beyond recession induced declines and returning to spending and revenue growth. According to executive budgets, general fund spending is projected to increase by 2.9 percent in fiscal 2015.

Recently Released Reports