2013 Spring Meeting in Review
Budget officers from 29 states gathered to discuss state fiscal issues.
Budget officers from 29 states gathered to discuss state fiscal issues.
Yesterday afternoon, Senate Majority Leader Harry Reid (D-NV) floated a legislative proposal to replace sequester cuts for the current fiscal year. In remarks delivered on the Senate floor, Sen. Reid indicated that Congress could reverse at least some fiscal 2013 funding cuts under sequestration by using savings achieved from wrapping up military operations in Iraq and Afghanistan.
Performance budgeting continues to be a big challenge for many states. Implementing an effective method of using information about the performance of state programs to influence how state tax dollars are spent has not proven easy. There seems to be some positive movement to new thinking on performance budgeting – especially based on learning from past performance budgeting projects.
National League of Cities
Brian Sigritz discusses trends in spending and revenue growth and what impact these, and sequestration, have on healthcare, transportation and education.
Today I am testifying before Congress on behalf of the states’ budget officers raising our concerns about the impact of federal uncertainty. Years of short-term federal budgeting through continuing resolutions (CRs) and crises like the fiscal cliff cost money and make it difficult for programs to reach their goals’ full potential. You can read my full testimony here.
With the sequester date set for March 1st, there is still some uncertainty as to what further actions – if any – Congress will take regarding the process of sequestration. At this time, most DC insiders are assuming that Congress will allow the automatic budget cuts to take effect March 1.
The latest edition of NASBO’s State Expenditure Report finds that the recent improvement in the national economy has not translated to strong growth in total state spending. This is largely due to the fact that state revenues have not increased as fast as Recovery Act funds have declined, leading to a unique situation in which total state expenditure growth has slowed during the same time that the national economy has been improving.
State fiscal conditions in fiscal 2013 are modestly recovering in step with the slowly improving national economy. General fund spending levels are expected to increase by 2.2 percent this fiscal year, which is less than half their historical average growth rate. Signs of budget volatility have subsided compared to the years immediately following the recession, and fiscal conditions in most states reflect continued fiscal stability.