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. Forty-two states enacted higher general fund spending levels in fiscal 2013 compared to fiscal 2012, and aggregate fiscal 2013 general fund revenues are expected to surpass pre-recession highs for the first time. However, many states are still challenged with unrelenting expenditure pressures in areas of health care and education in fiscal 2013.
Fiscal Survey of States, Fall 2012