New Report Says State Budgets Increasing
Tuesday, June 16, 2015 | Comments

State budgets continue on a path of stable, moderate spending and revenue increases, with 42 state budgets expected to increase in fiscal 2016.

Recommended budgets for the upcoming fiscal year will increase by about 3 percent on average, though progress remains slow for a number of states, according to the Spring 2015 edition of “The Fiscal Survey of States,” released by the National Association of State Budget Officers (NASBO).

“States are financially stable and are growing a bit above the inflation rate,” said NASBO President Mike Morrissey. “At the same time, state revenue growth is below the historical average and competing spending demands will require difficult political choices in some states.”

According to executive budgets, spending from the general fund (states’ own unrestricted funds) is projected to increase by 3.1 percent in fiscal 2016, below the historical average of 5.5 percent. Forty-two governors recommended higher spending levels compared with fiscal 2015, directing most additional dollars to K-12 education and Medicaid.

General fund revenue growth is also expected to be modest in fiscal 2016, with revenues projected to increase by 3 percent, compared with a 3.7 percent increase in fiscal 2015. Most executive budget proposals project relatively stable, moderate growth in revenues in the next fiscal year. However, some states are forecasting slow or negative revenue growth in fiscal 2016 because of various factors, including declining oil prices.

“Overall, state finances continue to improve, but fiscal conditions vary by state, with some doing very well and others facing more significant budgetary problems,” said NASBO’s Executive Director Scott Pattison. “Long-term spending pressures in K-12 education, health care, infrastructure, and pensions continue to grow, often faster than state revenues.”

Looking ahead to fiscal 2016, “Budgets are cautious, and limited revenue growth is expected to continue,” said Pattison.

The report is available here.

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