Budget Blog

In recent years, states have begun responding to the diminishing buying power of motor fuel revenue. States are concerned that in the long term, the current structure of state and federal fuel tax revenue will not be able to meet infrastructure funding needs as most gas taxes are set at fixed rates and do not rise with inflation, new vehicle fuel economy continues to increase, and the sale of electric vehicles rapidly grows. Since 2013, 33 states have taken actions to raise their fuel tax revenues. Many of the actions resulted from multi-year transportation plans and were combined with other revenue-raising actions. ... More

Overview Through January, 32 governors have given a State of the State address. In their speeches many governors said the state of the state is strong, yet they also noted challenges remain. Governors spoke about how their state is in a better position than a few years ago, while also discussing the need to continue to move forward, take bold action, and help future generations. Like previous years, education remained a focus in governors’ speeches. However, in this year’s addresses other areas received increased focus including workforce development, substance abuse, mental health, housing and homelessness, public ... More

Let’s Talk State Budgets: A Conversation with NASBO Leadership On February 7, the President, President-Elect, and Past President of NASBO engaged in a conversation about the outlook for state budgets. Watch the webinar for a discussion of: Economic trends Revenue collections and forecasts Preparation for an economic downturn Use of one-time funds from federal aid and budget surpluses How states are meeting present challenges and capitalizing on current opportunities 2023 initiatives Speakers Lauren Larson , President & Director, Colorado Office of State Planning ... More

As inflationary pressures, high interest rates, geopolitical conflict and other factors contribute to slower projections for economic growth, many economists are predicting that the next recession will occur sometime in 2023. How prepared are state governments to weather a possible downturn? After two consecutive years of widespread and sizeable budget surpluses and recent state policy actions to strengthen their reserves, states are now more financially prepared than ever to handle an economic downturn. Rainy day fund balances reached new heights in fiscal 2022, after already growing sharply in fiscal 2021. Based ... More

Overview Revenue forecasts play a vital role in budget decisions for the current year as well as future spending plans. NASBO’s revenue forecast webpage compiles recent forecasts from across the country. States vary in the frequency and timing of revenue forecasts. However, as shown in NASBO’s Budget Processes in the States , nearly all states release a revenue forecast in the late fall or early winter to help guide upcoming budget deliberations. Fiscal 2023 Revenue Forecasts Many states have revised revenue forecasts upward for the remainder of fiscal 2023 following better than projected ... More

Under the American Rescue Plan Act (ARPA) enacted in March 2021, state, local and tribal governments received $350 billion as part of the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) program. According to the law, SLFRF recipients are permitted to use the funds to respond to the public health and negative economic impacts of the pandemic; provide premium pay for essential workers; invest in water, sewer, and broadband infrastructure; and replace public sector revenue lost due to the pandemic. This last use – revenue replacement for the provision of government services – has so far narrowly claimed ... More

In an issue brief released today entitled State Budget Processes & Spending Federal Funds , NASBO describes the various nuances around states’ and territories’ legislative session and budget calendars, how they appropriate and spend federal funds, how they handle unanticipated funding – especially outside of legislative session, and recent changes to these processes in some states in response to the pandemic. States are better positioned to meet goals for federally-funded programs when federal granting agencies consider these aspects of their budget processes as they issue program guidance and set deadlines. ... More

Please Note: This blog was originally posted on August 18, 2022 based on partial data compiled by NASBO from recovery plans for 44 states and territories. The blog was updated on September 26 to incorporate more complete data from recovery plans for all 50 states, four territories and the District of Columbia. The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), authorized by the American Rescue Plan Act of 2021 (ARPA), allocated $195.3 billion for states and the District of Columbia and $4.5 billion for territories. Under the Treasury Department’s Compliance and Reporting Guidance , states, territories ... More