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State Budget Update: April 2008

Read the press release or consult a list of previous updates.

Constituents may download the report free through, and the public buy it for $30 from, NCSL's on-line bookstore; constituents also may access the report here.

With a few exceptions, state finances are deteriorating, in some cases considerably. This development has presented many state lawmakers with a twofold problem: keeping their fiscal year (FY) 2008 budgets in the black and enacting balanced budgets for FY 2009.

Current state fiscal conditions are being driven by weak revenue performance. State officials expected revenue growth to slow in FY 2008, but not as dramatically as it has. Since the November 2007 edition of this report, revenue problems have grown and budget holes have deepened. Whether or not the national economy is in recession--a subject of ongoing debate--is almost beside the point for some states because their fiscal situations have declined so much that they appear to be in a recession.

But the news is not bad everywhere. So far, some states have avoided fiscal problems because of special economic circumstances or economies based on energy-related revenues. But if the national economy continues to struggle and indeed falls into recession, the state fiscal situation will worsen. Even states with stable fiscal situations could be vulnerable to budget stress. And states already facing problems likely would confront more severe ones.

This report provides information on all 50 states and Puerto Rico. It is based on information collected from legislative fiscal directors in April 2008. It covers the revenue and expenditure situation for the first three quarters of FY 2008 for most states. It includes information on revenue performance, spending overruns, projections of budget gaps in FY 2008 and FY 2009, the revenue outlook for next year and the overall fiscal situation in each state.

List of Tables

1. Performance of Major Tax Categories: Personal Income Tax
2. Performance of Major Tax Categories: General Sales Tax
3. Performance of Major Tax Categories: Corporate Income Tax
4. Performance of Major Tax Categories: Other
5. FY 2008 Spending Overruns
6. Projected Budget Gaps for FY 2008
7. Projected Budget Gaps for FY 2009
8. Revenue Outlook for FY 2009
9. Summary of the State Fiscal Situation

Posted April 2008
E-mail statefiscal-info@ncsl.org for more information.
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