Budget Blog

Following strong gains in April tax collections , most states ended fiscal 2019 with year-over-year revenue growth. Many states saw positive gains in personal income tax collections, attributing the increases to both the payroll withholding component, reflecting continued economic growth, and a second consecutive year of higher collections from non-wage income (capital gains, dividends, bonuses). Changes in taxpayer behavior following federal tax reform significantly altered the timing of estimated state personal income tax payments, with some states noting that those taxpayers no longer had incentive to pay in ... More

As of July 18, four states with a July 1 fiscal year start date have not yet completed a full-year budget for fiscal 2020. Of the four, one state is awaiting the governor to complete action on the budget bills (Oregon), two governors have vetoed the budget (New Hampshire and North Carolina), and one is awaiting legislative completion (Massachusetts). Michigan's legislature has not yet finalized the budget but the state's fiscal year does not begin until October 1. Below is additional information on the states that have yet to enact a full-year budget for fiscal 2020: Massachusetts – House and Senate members are ... More

Updated June 4, 2019 States are reporting higher than expected income tax revenues in the month of April . The significantly higher April income tax revenues, for the most part, are making up for the substantially lower income tax revenues collected in December and January. Through November, year-to-date income tax revenue growth was 6.7 percent. Through January, year-to-date growth had declined to 0.6 percent. Following April’s strong collections, it now appears that year-to-date growth is returning to November levels. State Income Tax Revenue Growth in Fiscal Year 2018 and Early Fiscal Year 2019 Personal ... More

Overview Over the past several years, the number of states legalizing marijuana has quickly grown across the United States. According to the National Conference of State Legislatures (NCSL), a total of 34 states and the District of Columbia have established medical marijuana programs, while 10 states and the District of Columbia have legalized marijuana for recreational use. Some issues that states face when legalizing marijuana include determining the appropriate level of taxation, forecasting marijuana revenue, the budgetary impact, establishing a regulatory framework, and contending with banking issues ... More

The personal income tax is the single largest source of revenue to state governments, representing 46% of total state general fund revenue in fiscal 2018 according to NASBO’s State Expenditure Report . Forty-one states have a broad-based personal income tax. April is typically the month with the highest amount of personal income tax collections. Early indications are that many states experienced a positive “April surprise” this year, seeing strong growth in April income tax collections. The positive April surprise is likely due to several factors including continued growth in the economy, gains in non-withholding ... More

Last week, the United States Supreme Court heard oral arguments concerning the administration’s plans to add a citizenship question to the 2020 United States Census. While the administration has argued that it has the discretion to add a citizenship question and that it will help lead to a more accurate count, many opponents of the move believe that it will lead to undercounting. The question of an accurate count is important to states since funding from a number of federal programs is based upon statistics derived from the U.S. Census. In a recent study, the George Washington Institute of Public Policy found ... More

This issue brief on governors’ fiscal 2020 budgets takes a broad look at how gubernatorial proposals reflect states’ increasing use of data and evidence to inform decision-making, focusing on several key areas: • Reporting Performance Measures • Managing and Budgeting for Performance • Using Data Analytics • Investing in Evidence-Based Programs • Funding Program Evaluation • Implementing Statewide Initiatives • Building Staff Capacity The state examples provided are meant to be illustrative but not exhaustive. More

On April 4-5, members from 26 states gathered in Philadelphia to discuss the current status and trends for state budgets. Below are brief summaries of each session along with links to speaker presentations. FEDERAL ISSUES AFFECTING STATES Marcia Howard , Executive Director, Federal Funds Information for States Marcia Howard gave an overview of fiscal year 2020 spending and notable deadlines over the next year. She noted that most of what happens in federal spending is on autopilot as mandatory spending, with her presentation focused on the $639 billion in domestic discretionary spending that affects states. ... More