Early indications are that most states experienced a positive “April surprise” this year, in contrast to last year. April surprises often occur in states after taxpayers pay both their federal and state taxes. Sometimes the surprise can be a positive one as states experience higher than projected tax windfalls. Other times the surprise can be negative as was the case for most states last year. The primary reason for the slowdown in 2014 was related to the federal “fiscal cliff”.
Over the course of the past several months, governors in 47 states have released a budget proposal for fiscal 2016, and in some instances fiscal 2017. Three states enacted biennium budgets last year covering both fiscal 2015 and fiscal 2016.
As of February 18th, governors in 41 states have given a State of the State address.
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.
While state spending on corrections has grown sharply since NASBO first published the State Expenditure Report in 1987, much of the growth was seen in the 1990’s and early 2000’s.
States have begun to increase funding to elementary and secondary education following cuts brought upon by the national recession.
As discussed in NASBO’s Monday Washington Report, the U.S. Senate is preparing to vote on a short-term fix for the federal Highway Trust Fund (HTF). The full Senate is expected to vote on House-passed legislation that would transfer $10.8 billion into the HTF from the U.S. Treasury’s general fund, which is expected to provide sufficient funding for programs through May 31, 2015; the Senate is also expected to consider several amendments during debate.
Report delivers state-by-state comparative information on a range of capital budgeting concepts, practices, processes, and policies.
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.