Budget Blog

Early indications are most states and territories continued to see slow revenue growth through April, the tenth month of fiscal 2025 for most states (46 states will end their fiscal year on June 30th) and the largest month for tax collections for income tax states due to the tax filing deadline. In NASBO’s Fall 2024 Fiscal Survey of States , states projected fiscal 2025 revenues would be 1.9 percent higher than preliminary actual collections for fiscal 2024. Through April, most states appear to be meeting or exceeding these projections for another year of slow growth in tax collections but are not anticipating substantial ... More

As states work to finalize their budgets for fiscal 2026, many have published revised revenue forecasts, with most having revised estimates downward. A number of revenue forecasts discussed heightened economic uncertainty partly brought upon by changes at the federal level, while stating a cautious approach is warranted. Specifically, revenue forecasts noted the impact of potential changes in federal spending, federal tax provisions, trade policy including tariffs, federal workforce levels, immigration, geopolitical events, and consumer confidence in explaining the revisions. The lowered revenue forecasts come at ... More

In their State of the State addresses and budget proposals, governors have recommended a wide range of tax policy changes aimed both at providing tax relief and generating additional revenue through targeted increases. These revenue actions have included further reducing personal income taxes; lowering property tax burdens; ending the grocery tax; middle class tax relief including one-time refund checks; creating or expanding child tax credits; boosting earned income tax credits; targeted tax relief to retirees, farmers, and law enforcement officers; modifications to corporate taxes; expanding the sales tax base; ... More

The COVID-19 pandemic ushered in an atypical period for state and territory budgets marked by record-breaking revenue growth, unprecedented levels of surplus funds, and a sharp uptick in one-time expenditures. Recently, state fiscal conditions began to “normalize” as revenue growth slowed, collections came in closer to forecast, and states had less new recurring and one-time money to spend, bringing the recent era of substantial, widespread surpluses to a close. In examining state expenditures and budget conditions, it can be helpful to understand the impacts of states’ unique revenue performance of recent years. ... More

Through February, 44 governors from states and territories have delivered a State of the State speech, while 49 have proposed a new budget for fiscal 2026. NASBO is continuing to publish state-by-state summaries of both State of the State addresses and budget proposals . In their speeches and budget recommendations, governors focused on childcare needs including efforts to lower costs, increase access, support providers, partner with employers, create or expand childcare tax credits, establish a one-stop-shop for childcare services, rewrite childcare regulations, build new childcare centers, provide free childcare ... More

Through January, 33 governors have delivered a State of the State speech, while 32 have proposed a new budget for fiscal 2026. NASBO has b een publishing state-by-state summaries of both State of the State addresses and budget proposals . In both their speeches and budget r ecommendations, governors have emphasized affordability concerns while noting the need to lower housing costs, reduce childcare expenses, address the price of college, improve healthcare access, enhance food security, curb energy costs, and provide tax relief. Alaska – Budget proposal includes several affordability measures including ... More

What are the key characteristics of state budgeting and how do they contrast with federal budget practices? How do the fiscal roles of federal, state, and local governments vary and interact in our federalism system, and what are the implications for budget processes? Why is it important for the federal government to understand how state governments manage their finances and what can they learn from states? These questions and others are addressed in a recently released paper, Fiscal Contrast: An Analysis of State and Federal Fiscal Processes , a joint project of the Kem C. Gardner Policy Institute and NASBO published ... More

Despite minimal growth in tax collections in fiscal 2024, most states ended the year near their revenue forecast based on newly released end-of-year revenue totals. Comparing actual collections to forecasts is a better indicator of state revenue performance than year-over-year growth figures which, in many states, have been considerably impacted by recently enacted tax cuts. Early indications are that the majority of states closed fiscal 2024 with revenues above original forecasts, with many also seeing revenues come in above revised forecasts. Most states that saw revenues come in lower than revised forecasts were ... More