|
Table 9. Structural Deficit Projections |
|
State |
FY 2007 |
FY 2008 |
Beyond FY 2008 |
Comment |
|
Alabama |
No |
Yes |
Yes |
Katrina relief (both in the form of funds and FMAP relief in disaster-declared counties) helped greatly in funding Medicaid for FY 2007. This will enable Medicaid increases in FY 2007 to be funded largely from FY 2006 carry-forward made possible by this Katrina relief. |
|
Alaska |
No |
Yes |
Yes |
The current revenue forecast shows a deficit for FY 2007. It can be avoided by prefunding K-12 education with a portion of the FY 2006 surplus. |
|
Arizona |
N/R |
N/R |
N/R |
There is no structural deficit in FY 2006. FY 2007 depends on pending decisions on allocating the surplus. |
|
Arkansas |
No |
No |
No |
|
|
California |
Yes |
Yes |
Yes |
The state currently has surpluses because it borrowed more than $15 billion from private markets and another $10 billion-plus from special funds, local governments and schools. Large carry-in balances mask an underlying operating shortfall that California has not yet resolved. |
|
Colorado |
No |
No |
No |
Referendum C passed in the November 2005 election. This allows the state to retain excess revenues beyond the state's fiscal limit for a period of five years. This infusion of revenues has eliminated the structural deficit. |
|
Connecticut |
No |
Yes |
Yes |
A structural surplus of $489.3 million is anticipated in FY 2007, followed by structural deficits of $224.4 million in FY 2008, $307.7 million in FY 2009 and $412.5 million in FY 2010. |
|
Delaware |
N/R |
N/R |
N/R |
|
|
Florida |
No |
No |
No |
|
|
Georgia |
No |
No |
No |
|
|
Hawaii |
No |
No |
No |
|
|
Idaho |
No |
No |
Yes |
Officials anticipate that Medicaid, health care and corrections growth will outpace revenue growth in the long term. |
|
Illinois |
Yes |
Yes |
N/R |
The state’s pension problem continues to hamstring future budgets. |
|
Indiana |
No |
No |
No |
|
|
Iowa |
Yes |
Yes |
Yes |
The General Assembly will most likely not withstand the current expenditure limitation law and use reserve funds to balance the FY 2007 budget. Formula driven expenditure increases (K-12) and corrections and Medicaid cost increases continue to outpace revenue growth. |
|
Kansas |
Yes |
Yes |
Yes |
Projections for FY 2007 and onward current reflect yearly expenditures above estimated revenue. |
|
Kentucky |
No |
No |
No |
In the immediate future, the state is not expected to encounter a structural deficit. For years beyond the current biennium, however, it is difficult to anticipate a structural deficit for several reasons. First, recent tax law changes have modified revenue streams relative to historical patterns. Second, policy initiatives, along with other changes, will result in expenditure patterns that are different from past trends. These issues make it difficult to anticipate the future. |
|
Louisiana |
Yes |
Yes |
Yes |
|
|
Maine |
No |
Yes |
Yes |
The Legislature's fiscal office has just updated its projections of the structural gap for the 2008-2009 biennium. The general fund structural gap is estimated to be in the $425 million to $450 million range; this imbalance represents approximately 5.5% and 7.7% of projected spending levels in FY 2008 and FY 2009, respectively. |
|
Maryland |
Yes |
Yes |
Yes |
Projected spending continues to outpace projected revenue growth, partly due to landmark education aid spending increases that were enacted in 2002 and require large annual funding increases through FY 2008. Partly because of these and in combination with other administration enhancements in the FY 2007 budget, general fund spending grows 11% against general fund revenue growth projected at under 6%. A structural deficit in the range of approximately $200 million is projected for FY 2007, increasing to approximately $1 billion by FY 2011. |
|
Massachusetts |
Yes |
Yes |
N/R |
|
|
Michigan |
No |
No |
No |
|
|
Minnesota |
No |
No |
No |
|
|
Mississippi |
No |
N/R |
N/R |
FY 2008 and beyond have not been reviewed since the revised estimate was adopted on March 15, 2006. |
|
Missouri |
No |
N/R |
N/R |
Officials do not formally project revenues beyond the next fiscal year, so forecasting beyond FY 2007 is impossible. However, there are categories of expenditures that officials are watching cautiously: K-12 education, Medicaid and corrections. |
|
Montana |
No |
No |
No |
|
|
Nebraska |
No |
No |
Yes |
Internal legislative estimates of longer range revenue and expenditure patterns suggest a structural imbalance (recurring annual revenue less than current law obligations for the year) in FY 2009. |
|
Nevada |
No |
No |
N/R |
|
|
New Hampshire |
No |
N/R |
N/R |
|
|
New Jersey |
Yes |
Yes |
N/R |
Current estimates of the structural deficit range from $4 billion to $5 billion (14% to 18% of appropriations). The governor should propose solutions in March for FY 2007, but elimination of the structural deficit in one year seems unlikely. Future time frame are unclear. |
|
New Mexico |
No |
Yes |
Yes |
Recurring revenues are estimated to decline in FY 2007 and be relatively flat in FY 2008, while appropriations-particularly Medicaid-may grow. |
|
New York |
Yes |
Yes |
Yes |
|
|
North Carolina |
N/R |
Yes |
N/R |
|
|
North Dakota |
No |
No |
No |
The North Dakota Legislative Assembly meets biennially. The estimated budget surplus is for FY 2007. |
|
Ohio |
No |
No |
No |
|
|
Oklahoma |
No |
No |
No |
|
|
Oregon |
No |
No |
Yes |
|
|
Pennsylvania |
No |
Yes |
Yes |
The state continues to face fiscal pressures in the Medical Assistance budget, where expenditure growth outpaces the growth in state general fund revenue. In addition, the state must confront the loss of two funding sources currently used to help pay for Medical Assistance: Intergovernmental Transfers (IGTs) and managed care assessments. The federally mandated IGT phase-out, which began in 2003-2004, reduces revenue by approximately $110 million per year and will eliminate the IGT after 2008-2009. The federal Deficit Reduction Act of 2005 will terminate the managed care assessment in October 2009, reducing revenues by approximately $200 million. |
|
Rhode Island |
Yes |
Yes |
Yes |
|
|
South Carolina |
No |
No |
N/R |
|
|
South Dakota |
No |
No |
No |
|
|
Tennessee |
No |
No |
No |
|
|
Texas |
No |
No |
No |
|
|
Utah |
No |
No |
No |
The Legislature is anticipated to continue with a cautious approach to committing any one-time revenue for ongoing purposes. |
|
Vermont |
No |
Yes |
Yes |
Along with the use of one-time funds in FY 2007, structural deficits are anticipated because of longer-term differences in spending and revenues: general fund spending trends at 6% and revenue trends at 4% (and Medicaid spending growth is in excess of revenue growth). |
|
Virginia |
No |
No |
No |
Virginia is still in legislative session. The governor, the Senate, and the House each used the surplus primarily for one-time expenditures for transportation, capital outlay and the Chesapeake Bay (to varying degrees) in their respective budgets. Virginia is now engaged in a discussion about funding for transportation, which has thrown officials into budget overtime. |
|
Washington |
No |
No |
Yes |
|
|
West Virginia |
No |
No |
No |
|
|
Wisconsin |
No |
Yes |
Yes |
|
|
Wyoming |
No |
No |
Yes |
|
|
Totals: |
No = 37
Yes = 10
N/R = 3 |
No = 26
Yes = 19
N/R = 5 |
No = 19
Yes = 20
N/R = 11 |
|
|
N/R = No response.
Source: National Conference of State Legislatures, March 2006. |
