State Budget Update: Spring 2012

Introduction

State fiscal conditions continue to improve at a slow and steady pace. A spring 2012 survey of state legislative fiscal officers found revenue performance remains positive and expenditures in most states are stable. And for the first time since before the Great Recession, a number of states are projecting to end the fiscal year with small unobligated balances.

In another sign of improving fiscal conditions, few states have faced mid-year budget shortfalls in fiscal year (FY) 2012. This is good news for state lawmakers who have closed more than $500 billion in budget gaps over the previous four fiscal years. In addition, fewer budget gaps are projected for FY 2013 compared with recent years. Despite this encouraging news, a degree of uncertainty still lingers over state budgets. Concerns about unemployment levels, potential federal deficit reduction actions, spending pressures and global economic events, are contributing to a cautious state budget outlook.

This report is based on data collected from legislative fiscal officers in March and April 2012. It includes information on:

• FY 2012 tax performance;
• Projected return to peak revenues
• Spending overruns in FY 2012;
• New FY 2012 budget gaps and projected FY 2013 budget gaps;
• Projected FY 2012 unobligated balances; and
• Summary of the state fiscal situation.

This report provides information on all 50 states and the District of Columbia.