Fiscal Affairs Program
State Budget Update: April 2003
Posted 24 April 2003
Contents
State Budget Update: April 2003
State budgets are awash in red ink. For three consecutive years, nearly every state has encountered severe budget shortfalls. These shortages began appearing in FY 2001 and have grown dramatically each year since. Cumulatively, states have had to close gaps approaching $200 billion.
Actions to balance budgets--legally required in 49 states--have ravaged many programs. Beleaguered lawmakers repeatedly pared spending. They also tapped reserves and raised revenues, but all this has been woefully inadequate to solve relentless budget problems. Already plagued by anemic revenue performance, lawmakers have been besieged by spending overruns--from Medicaid to homeland security to emergency snow removal. While the war with Iraq did not have a direct effect on state finances, skittish investors and wary consumers have contributed to state budget problems.
Many states had expected to be on solid footing by now, but recent data show they are far from turning the corner on budget problems. Revenue performance has been disappointing, so nearly every state has revised its forecast downward. Now wary lawmakers are keeping a watchful eye on April personal income tax collections--an important revenue source for 41 states and the District of Columbia. Although final numbers will not be available until May, early indications point to another below par collection season. This could throw precariously balanced fiscal year (FY) 2003 budgets into a tailspin. It also would mean that FY 2004 budgets may need to be revised.
This report is based on information collected from legislative fiscal directors in April 2003. It covers the revenue and expenditure situation for most states three-quarters of the way through FY 2003. Forty-six states began their fiscal year on July 1. (Note 1) It also reports state budget gaps for FY 2004, tax enactments to date, tax and revenue proposals under consideration, and the potential effects of budget balancing on six categories of state spending: elementary-secondary (K-12) education, higher education, state employees, Medicaid, Temporary Assistance to Needy Families (TANF) and corrections.
These are the highlights from NCSL's survey:
FY 2003 Highlights
- Several states already have taken steps to resolve budget problems. As a result, the cumulative shortfall has declined from $25.7 billion in late January to $21.5 billion by late April. With only two months left in the fiscal year, more than half the states still have gaps to close.
- Of the 27 states still facing FY 2003 budget holes, 13 have shortfalls in excess of 5 percent of the state budget. Some states, like California and New York, are resolving their FY 2003 and FY 2004 gaps concurrently.
- Thirty-nine states and the District of Columbia have faced budget shortfalls at some point during FY 2003. The total reached $29.9 billion, growing slightly higher than the collective gap reported in late January. This amount follows the $49.1 billion shortage that states had to resolve when they were enacting their FY 2003 budgets last year.
- With only a few exceptions, state revenue collections have failed to meet budgeted forecasts. Only three states--Alaska, Rhode Island and Wyoming--reported that revenues performed above original estimates. Revenues were on target in 10 states and below in 37 others.
- Forty-four states and the District of Columbia have revised their FY 2003 revenue estimates, mostly downward. Twenty-nine states reported that revenues were on target with the revision. Seven were above, and nine were below the revised level.
- Thirty-four states report that spending is exceeding budgeted levels, compared with 37 states reporting overruns in January. Of these, 28 report that Medicaid or health care programs are over budget.
FY 2004 Projections
- FY 2004 is proving to be another extremely difficult budget year. In late January, as most states were just beginning to craft next year's budgets, 36 reported that they had to close gaps totaling $68.7 billion. (Note 2) At some point during the fiscal year, 41 states and the District of Columbia faced shortfalls totaling $78.4 billion (three states did not provide information). In 37 states, the shorage reached or exceeded 5 percent of the state budget, with 19 of these above 10 percent.
- Because most states currently are meeting in legislative session, they are in the process of resolving FY 2004 budget problems. Although some states have eliminated their gaps, by late April more than half the states and the District of Columbia still faced shortfalls. The total was $53.5 billion.
- States have been cutting spending for several consecutive years, so virtually every program has been affected by budget cuts. Types of budget reductions under consideration include:
- K-12 education. At least 21 states have proposals that would affect funding for K-12 education. Proposals include implementing across-the-board cuts in district funding, lowering per pupil state aid, reducing transportation funds, cutting education equalization grants to local governments, chopping teacher salary matching programs and paring class size reduction funds.
- Higher education. As many as 26 states are examining proposals to reduce funding for higher education. Actions under consideration include administrative cuts, across-the-board reductions, reorganization of higher education for efficiency and wage freezes. Many of the reductions are being accompanied by authority to boost tuition. At least 16 states already have proposals to raise tuition to help offset budget cuts.
- State employees. At least half the states are considering proposals that would reduce state employee expenses. Some of the most common proposals affect employee compensation and include wage and benefit freezes, retirement programs changes and health care programs adjustments. Although only a few states have imposed layoffs, more than a dozen are looking to eliminate vacant positions. Other states are considering hiring freezes and early retirement programs. At least two states are exploring agency reorganization.
- Medicaid. At least 27 states have proposals to contain Medicaid costs. These include reducing benefits and eligibility, seeking pharmacy costs savings, reducing provider rates, scaling back various services and freezing certain enrollments.
- TANF. Only a few states currently are considering proposals to curtail TANF spending. Proposals include reducing overall expenditures and eliminating rate adjustments for child care providers.
- Corrections. As many as 19 states are exploring savings in corrections budgets. In addition to overall spending cuts, other proposals include closing correctional facilities, changing compensation packages for personnel, delaying construction and modifying sentencing.
- Other proposals. A broad range of other proposals are under consideration including across-the-board reductions for all state agencies, securitizing tobacco settlement funds, payroll shifts, information technology cuts, tax amnesty programs and state asset sales. A few states note that everything is on the table as they work to close their budget gaps.
FY 2004 Revenue Actions
- On top of spending reductions, many states are considering raising additional revenues. Six states already have boosted cigarette levies, and two have raised beer taxes. Other actions through late April include delaying previously enacted tax cuts, increasing health premium taxes, imposing corporate surcharges, removing certain exemptions and boosting taxes on cell phones and phone services.
- Although tax actions have been limited thus far, many states have proposals under serious consideration. Fourteen are considering higher cigarette and tobacco taxes. Eleven are exploring sales tax changes, either raising the rate or expanding the base. Two states that currently do not levy sales taxes are looking at narrow ones.
- Half a dozen states are examining higher personal income taxes--either through reducing exemptions, increasing rates or adding higher-income brackets. A similar number are looking at business taxes. Other tax proposals under serious consideration include raising real estate transfer taxes, extending previously enacted increases beyond their scheduled sunset date, decoupling from federal tax provisions and closing tax loopholes. Several states are looking at a broad range of proposals that include most types of taxes.
- In addition to tax increases, many states are looking at other revenue possibilities. At least 19 are considering fee increases, with some of the proposals quite extensive. Fifteen are examining fund transfers--shifting balances from earmarked or special funds to the general fund. At least five of these states are eyeing their tobacco settlement money. Eleven states have proposals to boost gambling taxes or expand the type of gambling they allow.
Of historical note, for the first time ever, the Arkansas General Assembly adjourned without passing the budget. The governor is expected to call a special session in May. The Idaho Legislature was scheduled to adjourn on April 11 but missed that date. The Legislature has set a record for the longest session in the state's history.
Notes:
- The four exceptions are New York (April 1), Texas (Sept. 1), and Alabama and Michigan (Oct. 1). (back)
- The original sum was $68.7 billion, but increased to $72.2 billion with the last-minute addition of Illinois' $3.5 billion gap. (back)
|
Table 1. FY 2003 Budget Gaps |
|
State/ Jurisdiction |
Gap as of Late January |
Highest Projected Gap |
Current Estimated Gap |
|
Dollars in Millions |
Percentage of General Fund Budget |
Dollars in Millions |
Percentage of General Fund Budget |
Dollars in Millions |
Percentage of General Fund Budget |
|
Alabama Education Trust Fund* |
$199.0 |
4.7% |
$199.0 |
4.7% |
$0.0 |
0.0% |
|
Alabama General Fund* |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Alaska |
$747.8 |
30.0% |
$747.8 |
30.0% |
$500.0 |
25.0% |
|
Arizona* |
$343.0 |
5.7% |
$343.0 |
5.7% |
$0.0 |
0.0% |
|
Arkansas |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
California* |
$8,500.0 |
11.0% |
$10,000.0 |
13.3% |
$8,200.0 |
10.9% |
|
Colorado |
$803.0 |
13.2% |
$803.0 |
13.2% |
$0.0 |
0.0% |
|
Connecticut* |
$650.0 |
5.4% |
$665.3 |
5.5% |
$0.0 |
0.0% |
|
Delaware |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Florida |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Georgia* |
$620.0 |
4.3% |
$620.0 |
4.3% |
$110.0 |
0.8% |
|
Hawaii |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Idaho* |
$154.0 |
7.9% |
$154.0 |
7.9% |
$154.0 |
7.9% |
|
Illinois* |
$592.0 |
2.5% |
$1,580.0 |
6.5% |
$1,580.0 |
6.5% |
|
Indiana |
$800.0 |
7.6% |
$800.0 |
7.6% |
$800.0 |
7.6% |
|
Iowa |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Kansas* |
$150.4 |
3.5% |
$255.4 |
5.9% |
$105.0 |
2.4% |
|
Kentucky* |
$105.5 |
1.5% |
$105.5 |
1.5% |
$0.0 |
0.0% |
|
Louisiana |
$18.6 |
0.3% |
$18.6 |
0.3% |
$0.0 |
0.0% |
|
Maine* |
$43.3 |
1.7% |
$60.4 |
2.4% |
$14.7 |
0.6% |
|
Maryland* |
$413.6 |
4.0% |
$466.3 |
5.0% |
$0.0 |
0.0% |
|
Massachusetts* |
$650.0 |
3.1% |
$650.0 |
3.1% |
$150.0 |
0.6% |
|
Michigan* |
$158.2 |
1.7% |
$158.2 |
1.7% |
$0.0 |
0.0% |
|
Minnesota* |
$356.0 |
2.5% |
$368.0 |
2.5% |
$12.0 |
0.04% |
|
Mississippi |
$96.8 |
2.8% |
$96.8 |
2.8% |
$0.0 |
0.0% |
|
Missouri |
$300.0 |
4.5% |
$348.0 |
5.5% |
$323.0 |
4.5% |
|
Montana |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Nebraska* |
$174.0 |
6.6% |
$224.0 |
8.5% |
$224.0 |
8.5% |
|
Nevada* |
$198.3 |
9.8% |
$198.3 |
9.8% |
$198.3 |
9.8% |
|
New Hampshire* |
$58.0 |
4.7% |
$58.0 |
4.7% |
$23.1 |
1.9% |
|
New Jersey* |
$1,100.0 |
4.7% |
$1,100.0 |
4.7% |
$1,100.0 |
4.7% |
|
New Mexico |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
New York* |
$2,500.0 |
6.3% |
$2,500.0 |
6.3% |
$2,500.0 |
6.3% |
|
North Carolina* |
$0.0 |
0.0% |
$125.0 |
0.8% |
$125.0 |
0.8% |
|
North Dakota |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Ohio* |
$720.0 |
3.2% |
$720.0 |
3.2% |
$0.0 |
0.0% |
|
Oklahoma |
$291.7 |
6.5% |
$352.3 |
7.8% |
$352.3 |
7.8% |
|
Oregon* |
$900.0 |
16.0% |
$1,038.0 |
18.8% |
$1,063.0 |
18.5% |
|
Pennsylvania |
$433.0 |
2.1% |
$735.8 |
3.4% |
$735.8 |
3.4% |
|
Rhode Island* |
$0.0 |
0.0% |
$36.8 |
1.4% |
$36.8 |
1.4% |
|
South Carolina |
$348.2 |
6.4% |
$468.0 |
8.6% |
$468.0 |
8.6% |
|
South Dakota |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Tennessee |
(N/R) |
(N/R) |
$500.0 |
5.2% |
$500.0 |
5.2% |
|
Texas |
$1,795.6 |
5.8% |
$1,795.6 |
5.8% |
$1,795.6 |
5.8% |
|
Utah* |
$7.8 |
0.0% |
$7.8 |
0.0% |
$0.0 |
0.0% |
|
Vermont* |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Virginia* |
$950.0 |
7.7% |
$950.0 |
7.7% |
$0.0 |
0.0% |
|
Washington |
$133.0 |
1.2% |
$133.0 |
1.2% |
$133.0 |
1.2% |
|
West Virginia |
$20.0 |
0.7% |
$30.0 |
1.0% |
$30.0 |
1.0% |
|
Wisconsin* |
$373.2 |
3.3% |
$373.2 |
3.3% |
$283.6 |
2.5% |
|
Wyoming |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
District of Columbia |
$0.0 |
0.0% |
$134.0 |
4.0% |
$0.0 |
0.0% |
|
Total |
$25,704.0 |
|
$29,919.1 |
|
$21,517.2 |
|
|
Key: (N/R) = No response |
|
Notes:
Puerto Rico did not respond to this survey.
Alabama--Efforts are underway to resolve a recently reported Medicaid shortfall in FY 2003. If proposed legislation does not resolve it, problems for FY 2004 will be compounded.
Arizona--The budget gap was resolved by a March 17 special session.
California--The budget gap figure provided at the end of January was based on the governor's estimate. The figures shown for the highest estimated gap in FY 2003 and the current FY 2003 gap were provided by the Legislative Analyst's Office.
Connecticut--The state expects to end FY 2003 with a $700,000 surplus. This amount results from passage of the FY 2003 deficit mitigation plan (PA 03-2, HB 6495); however, since all intended savings may not be fully implemented and revenue erosion could continue, it is likely that the state will end FY 2003 with a budget deficit, the magnitude of which will be projected in late April or early May.
Georgia--The $110 million gap is based on the revised revenue estimate.
Idaho--Plans to resolve the FY 2003 budget gap include tapping all cash reserves and imposing 3.5% cuts on non-education budgets.
Illinois--Those figures are the Commission's most current revenue estimates published in late March and represent only revenue gaps.
Kansas--The revenue projection is a preliminary estimate; the official estimate will occur on April 22, 2003.
Kentucky--The FY 2003 budget was enacted March 25, 2003, and is balanced based on a number of actions. The FY 2002 session adjustments are actually increased revenue measures that passed in FY 2002 but were never included on the revenue side because no enacted budget came from the FY 2002 session. An official revision to include these items was never made by the budget office because of a lack of budget and was always shown as a negative resource. These included the tax amnesty program and an increase in some court fees. However, because Kentucky never had an enacted budget, the state technically never had a budget shortfall because of a decline in revenues. The budget that was enacted in FY 2003 was based on the revenue estimates made in January 2003.
Maine--Maine already has adjusted its general fund budget twice since the close of the last regular session in April 2002. In a special session in November 2002, the FY 2003 budget was adjusted by $228.9 million. In early February 2003, Maine passed another emergency FY 2003 budget to address a shortfall created by the December 2002 revenue revisions, which adjusted revenue downward by $43.6 million in FY 2003. The March 2003 revenue revisions adjusted revenue downward again, this time by $17.1 million. A second Emergency Budget Bill was enacted April 16, 2003, that addressed the FY 2003 shortfall. The difference between the $17.1 million and the $14.7 million identified as the current shortfall reflects a small projected balance and additional FY 2003 revenue enacted as part of the 2004-2005 biennial budget bill.
Maryland--A surplus of $1.4 million is projected for FY 2003 based on 2003 session action. The increase in the gap for FY 2003 is based on additional deficiency spending of $9.9 million and a revenue write-down of $106.1 million and on appropriations of $63.3 million withdrawn by the governor in February 2003.
Massachusetts--Mid-year spending cuts, closing of corporate tax loopholes and one-time transfers have closed most of the FY 2003 gap, although the gap could grow again if the April/May filing season is weak.
Michigan--The projected $158.2 million FY 2003 budget shortfall was eliminated on Feb. 19, 2003, when the Legislature approved reductions in state appropriations to eliminate the projected budget deficit. Current estimates indicate that the FY 2003 budget is in balance.
Minnesota--The $356 million budget problem was resolved in mid-February. Since then, a budget forecast at the end of February indicated an additional $12 million (0.04%) shortfall for FY 2003. That problem has not yet been resolved.
Nebraska--The current year estimate was revised downward in February 2003.
Nevada--Updated revenue projections will be made in late April by the Economic Forum. The 2003 Legislature must use these projections to develop the 2003-2005 biennial budget. A more accurate figure on the estimated shortfall will be available at that time.
New Hampshire--Transfers from the Revenue Stabilization Reserve Account will reduce this deficit to zero. The change from February was from an executive order expected to save $19 million and additional estate and legacy tax collections of $14 million.
New Jersey--The FY 2003 gap is being addressed by lapses (underspending and debt service savings from refinancing and delayed bond issuance) and forced spending restraints (including withholding a final school aid payment into the following fiscal year); and by taking in an additional $417 million in tobacco bond proceeds above the amount anticipated in the FY 2003 budget.
New York--The FY 2003 budget gap was rolled into FY 2004. It is unresolved at present.
North Carolina--Disappointing March collections have led to the possibility of a budget gap for the year. The current forecast range estimate is from a surplus of $77 million to a $323 million shortfall.
Ohio--The revenue estimates have not been revised since February, but they seem to be on track.
Oregon--The estimate is from the close-of-session forecast; total biennial revenue is down by $2.1 billion from the original $11.1 billion forecast. This does not account for previous actions to address the current shortfall. Since Oregon budgets on a biennial basis, the FY 2003 amount and percentage are estimates.
Rhode Island--Shortfall amount includes $7.8 million in reappropriations from FY 2002.
South Carolina--The Budget and Control Board approved across-the-board reductions of 8.73% for FY 2003.
Utah--The FY 2003 budget currently is balanced.
Vermont--To date, Vermont is on target with some possibility on the upside.
Virginia--The gap has been addressed with 2003 session actions.
Wisconsin--Wisconsin Act 1 (2003) reduced the gap by adjusting FY 2003 appropriations and fund balances. |
|
Source: National Conference of State Legislatures survey of legislative fiscal offices, April 2003. |
|
Table 2. General Fund Revenue Performance
through March 31, 2003 |
|
State/Jurisdiction |
Budgeted Estimate |
Revised Estimate |
Date Estimate Revised |
|
Above |
On Target |
Below |
Not Applicable |
Above |
On Target |
Below |
|
Alabama* |
|
|
x |
|
x |
|
|
February 2003 |
|
Alaska |
x |
|
|
|
|
x |
|
The revision is dated April 10; revenues are on target now but the revision may be slightly optimistic. |
|
Arizona |
|
|
x |
|
x |
|
|
March 3, 2003 |
|
Arkansas |
|
x |
|
|
|
x |
|
Feb. 17, 2003 |
|
California |
|
|
x |
|
|
|
x |
January 2003 |
|
Colorado |
|
|
x |
|
|
x |
|
March 20, 2003 |
|
Connecticut |
|
|
x |
|
|
x |
|
March 28, 2003 |
|
Delaware |
|
|
x |
|
|
x |
|
March 21, 2003 |
|
Florida |
|
x |
|
|
|
x |
|
March 14, 2003 |
|
Georgia |
|
|
x |
|
|
|
x |
March 2003 |
|
Hawaii |
|
|
x |
|
|
|
x |
March 13, 2003 |
|
Idaho |
|
|
x |
|
|
x |
|
February 2003 |
|
Illinois |
|
|
x |
|
|
x |
|
March 2003 |
|
Indiana |
|
|
x |
|
|
x |
|
April 10, 2003 |
|
Iowa |
|
x |
|
|
|
x |
|
April 9, 2003 |
|
Kansas |
|
|
x |
x |
|
|
|
The official estimate will be made on April 22, 2003. |
|
Kentucky |
|
x |
|
|
|
x |
|
January 2003 |
|
Louisiana |
|
|
x |
|
|
x |
|
January 2003 |
|
Maine |
|
|
x |
|
|
x |
|
March 2003 |
|
Maryland |
|
|
x |
|
|
|
x |
March 2003 |
|
Massachusetts |
|
|
x |
|
|
x |
|
February 2003 |
|
Michigan |
|
x |
|
|
|
x |
|
Jan. 14, 2003 |
|
Minnesota |
|
|
x |
|
x |
|
|
February 2003 |
|
Mississippi |
|
|
x |
|
|
x |
|
November 2002 |
|
Missouri |
|
|
x |
|
|
|
x |
December 2002 |
|
Montana |
|
|
x |
|
|
x |
|
April 10, 2003 |
|
Nebraska |
|
|
x |
|
|
x |
|
February 2003 |
|
Nevada |
|
x |
|
x |
|
|
|
Updated revenue projections will be made in late April by the Economic Forum. |
|
New Hampshire |
|
|
x |
x |
|
|
|
|
|
New Jersey |
|
|
x |
|
|
x |
|
Feb. 4, 2003 |
|
New Mexico |
|
x |
|
|
|
x |
|
February 2003 |
|
New York |
|
|
x |
|
|
|
x |
January 2003 |
|
North Carolina |
|
|
x |
|
|
|
x |
April 2003 |
|
North Dakota |
|
x |
|
|
|
x |
|
December 2002 |
|
Ohio |
|
|
x |
|
|
x |
|
February 2003 |
|
Oklahoma |
|
|
x |
|
|
x |
|
March 2003 |
|
Oregon |
|
|
x |
|
|
|
x |
March 2003 |
|
Pennsylvania |
|
|
x |
|
|
x |
|
March 20, 2003 |
|
Rhode Island |
x |
|
|
|
x |
|
|
January 2003 |
|
South Carolina |
|
|
x |
|
|
x |
|
February 10, 2003 |
|
South Dakota |
|
|
x |
|
x |
|
|
February 2003 |
|
Tennessee |
|
|
x |
|
x |
|
|
February 2003 |
|
Texas |
|
|
x |
|
|
x |
|
January 2003 |
|
Utah |
|
x |
|
x |
|
|
|
|
|
Vermont |
|
x |
|
|
|
x |
|
Jan. 15, 2003 |
|
Virginia |
|
|
x |
|
|
x |
|
December 2002 |
|
Washington |
|
|
x |
|
|
|
x |
March 19, 2003 |
|
West Virginia |
|
|
x |
x |
|
|
|
|
|
Wisconsin (N/R) |
|
|
|
|
|
|
|
The status of FY 2003 revenue collections and current 2003-2005 estimates will be reviewed in May. |
|
Wyoming |
x |
|
|
|
x |
|
|
Jan. 13, 2003 |
|
District of Columbia |
|
|
x |
|
|
x |
|
February 2003 |
|
Total |
3 |
10 |
37 |
5 |
7 |
29 |
9 |
|
|
Key:
(N/R) = No response |
|
Notes:
Puerto Rico did not respond to this survey.
Alabama--This information reflects revenue performance for the General Fund and the Education Trust Fund. |
|
Source: NCSL survey of legislative fiscal offices, April 2003. |
|
Table 3. Performance of Major Tax Categories
through March 31, 2003, unless otherwise noted |
|
State/Jurisdiction |
Personal Income Tax |
Corporate Income Tax |
Sales Taxes |
Other/Notes |
|
Alabama |
Through March, personal income tax collections were 7.5% above the previous year, ahead of the February 2003 revision, but still below the budgeted amount. |
Corporate income tax collections are $11 million higher than the February 2003 revised estimate. |
Sales taxes are performing better than the February revised estimate but remain below the original budget. |
Utility tax receipts are exceeding the February revised forecast. Insurance premium tax collections (which are deposited to the general fund) are $9 million ahead of projections. |
|
Alaska |
(N/A) |
On target. |
(N/A) |
Oil revenue is higher than expected; all other categories are on target |
|
Arizona |
The personal income tax is 2.8% below FY 2002 collections. |
The corporate income tax is 4.6% above FY 2002 collections. |
The sales tax is 2% above FY 2002 collections. |
|
|
Arkansas |
Personal income tax collections are slightly above forecast. |
Corporate income tax collections are 3.8% above forecast. |
Through February, sales tax collections are 1.6% above forecast; use tax collections are slightly below forecast. |
Due to the forecast revision on Feb. 17, 2003, all major tax components basically are on track. |
|
California |
|
|
|
Year-to-date revenues are $203 million (0.4%) lower than the budgeted forecast. |
|
Colorado |
Personal income taxes have under-performed compared to the budgeted forecast, but are holding their own compared to the revised revenue estimate. |
(N/R) |
General sales taxes have under-performed compared to the budgeted forecast, but are ahead of the most recent estimate. Concerns exist. |
|
|
Connecticut |
Personal income tax collections are below budgeted expectations. |
The corporate income tax has performed relatively well, as planned. |
Sales tax collections are below budgeted expectations. |
|
|
Delaware |
The personal income tax is 3.1% below forecast. |
The corporate income tax is 15.7% above forecast. |
(N/A) |
The corporate franchise tax is 12.5% below forecast. |
|
Florida |
(N/A) |
Corporate income tax collections are above estimate. |
The general sales tax is on track with the revised estimate, which was revised down for the year by $161 million, or 1%. |
Overall, revenues have performed $200 million above the July 2002 estimate. |
|
Georgia |
Personal income tax collections are 4.4% below estimate. |
Corporate income tax collections are 7.7% below estimate. |
General sales tax collections are 1.3% below estimate. |
|
|
Hawaii |
The personal income tax is down 3% from last year. |
(N/R) |
The general excise tax is up 10.5% from last year. |
|
|
Idaho |
Personal income tax collections are slightly better than projected. |
Corporate income tax collections are slightly lower than projected. |
Sales tax collections are much better than expected. |
Idaho projects an overall 3.7% increase in general fund revenues over FY 2002. |
|
Illinois |
Personal income tax withholding is flat; final payments and estimated payments are down. |
Performance of corporate income tax collections is fair. |
Sales tax collections are flat to down compared with estimates. |
|
|
Indiana |
Personal income tax collections are on target with the December 2002 forecast. |
Corporate income tax collections are on target with the December 2002 forecast. |
Sales tax collections are performing lower than December 2002 projections. |
|
|
Iowa |
|
|
|
Overall tax collections are slightly above (0.80%) forecast. |
|
Kansas |
Based on November estimates, the personal income tax is down 2.6%. |
Based on November estimates, the corporate income tax is down 25.6%. |
Based on November estimates, the retail sales tax is down 1.5 %. |
|
|
Kentucky |
Personal income tax is above forecast by 3.5%. |
Corporate income tax through March is up 52.9% ($163 million versus $106.6 million), in part because FY 2002 was such a bad year. |
The sales tax is above forecast by 3.7%. |
|
|
Louisiana |
Personal income tax collections are down. |
Corporate income tax collections are down. |
Sales tax collections are down. |
Franchise tax collections are down. |
|
Maine |
Personal income tax revenues are running 1.3% ahead of revised projections (primarily in withholding, which is running below budget in early April--this is likely a timing issue between months). |
Corporate income tax collections are running below revised estimates by 1.7%. |
Sales tax collections, based on very slow February sales, were $3.5 million (0.6%) below the revised estimate. |
Cigarette tax collections have been falling consistently below budget during the last few months and are running $4.3 million (5.5%) below estimate. Insurance premium taxes have been running ahead of budget by $5.7 million (22.3%). Estimates for these tax sources were not revised in March. |
|
Maryland |
Personal income tax revenues are on target with the revised revenue estimate. |
Corporate income tax revenues had been running well ahead of estimate all year, but are now below estimate due to a large drop in gross receipts in March (traditionally the largest month for gross receipts because it is the due date for final payments from companies with a calendar year tax year). |
The sales tax is below estimate due to very weak collections in March. March revenues reflect sales in February, which were depressed by, among other things, severe winter weather. |
Lottery revenues are running below estimate and also were affected by the weather in February. |
|
Massachusetts |
Baseline withholding (after adjusting for tax changes) remains down 1.4% through March, compared to the same period in FY 2003. Other income generally is worse than withholding, with estimated payments showing baseline decline of 12.5%. Total income is 5.4% below FY 2002 actual and 4.6% below FY 2002 baseline year to date. |
Corporate and business taxes are showing weak (4.4%) baseline growth, following a precipitous decline in FY 2002. |
Sales tax baseline growth is down 1.2%. |
All other taxes are 16.6% (net) above FY 2002, in large part because of a very successful tax amnesty program and higher cigarette tax collections. Baseline growth for this category is 4.7%. |
|
Michigan |
Tax collections have been consistent with the consensus revenue estimate reached on January 14. |
Tax collections have been consistent with the consensus revenue estimate reached on January 14. |
Tax collections have been consistent with the consensus revenue estimate reached on January 14. |
|
|
Minnesota |
The personal income tax is below forecast. |
The corporate income tax is above forecast. |
The sales tax is above forecast. |
For February and March, total revenues are $56 million above the February forecast. |
|
Mississippi |
Compared to the original estimate, the personal income tax is down 9.3%. |
Compared to the original estimate, the corporate income tax up 16.6%. |
Compared to the original estimate, the sales tax is down 0.6%. |
For the past two months, collections have been above the sine die estimates, but year-to-date collections remain below the budgeted estimate. |
|
Missouri |
Personal income tax is 2.5% below FY 2002. |
Corporate income tax is 24.1% below FY 2002. |
Sales tax is 0.6% below FY 2002. |
|
|
Montana |
Slightly below forecast. |
Slightly below forecast. |
(N/A) |
|
|
Nebraska |
Personal income tax collections are below both the original and the revised estimates. |
Corporate income tax collections are below the original estimate, but ahead compared to the revised estimate. |
Sales tax collections are below the original estimate, but ahead compared to the revised estimate. |
Miscellaneous tax collections are below both the original and the revised estimates. Overall, tax collections are on target to slightly ahead of estimates. |
|
Nevada |
(N/A) |
(N/A) |
For the first seven months of the fiscal year, sales tax collections are on target at a 5.2% increase over the same period one year ago. |
Gaming taxes are projected to increase 3.2% in FY 2003 (for the first seven months of the fiscal year, gaming taxes have performed better than expected with a 5% increase over the same period one year ago). |
|
New Hampshire |
(N/R) |
Business taxes are below plan by $6.4 million (8%). |
(N/A) |
|
|
New Jersey |
The personal income tax is running 1% below March 31, 2002. |
The corporate income tax is up 85% due to tax reform enacted last year, and is running above revised estimates. |
Sales tax is flat. |
|
|
New Mexico |
Personal income tax collections are running slightly above estimate. |
(N/R) |
General sales tax collections are running close to target. |
Severance taxes are slightly above prior year collections. |
|
New York |
(N/R) |
(N/R) |
(N/R) |
|
|
North Carolina |
Withholding tax receipts are flat, but at least stable. |
Corporate income tax collections in March were down 18% compared to 25% to 30% growth for September and December. |
Sales tax collections have gone from 1% to 2% growth for the last three quarters of 2002 to negative 2% for the first quarter of 2003. |
|
|
North Dakota |
The personal income tax is up 1.5%. |
The corporate income tax is down 3.2%. |
The sales tax is down 1.1%. |
|
|
Ohio |
The personal income tax is below estimate. |
The corporate franchise tax is above estimate. |
Auto sales are above estimate, but non-auto sales are below. |
Public utilities revenue is below estimate, but kilowatt-hour excise taxes are above. |
|
Oklahoma |
Personal and corporate income taxes are down 18.7%. |
Personal and corporate income taxes are down 18.7%. |
The sales tax is down 10.3%. |
The gross production (natural gas) tax is up 12.1%; the motor vehicle tax is down 19.9%. |
|
Oregon |
Personal income tax revenue is significantly below forecasted amounts and continues to decline. |
Corporate income tax is significantly below forecasted amounts, with the latest data indicating that revenue is stabilizing. |
(N/A) |
Overall general fund revenue performance is down. |
|
Pennsylvania |
Personal income tax collections are 3.7% below the year-to-date estimate and are consistently failing to meet the monthly estimates. |
Corporate income taxes are 2.9% below the year-to-date estimates. |
Sales taxes are 0.1% below the year-to-date estimate, missing the monthly estimate for the first time in March. |
|
|
Rhode Island |
The personal income tax is running below estimates. |
The business corporation tax is running significantly ahead of estimates. |
The sales tax is running ahead of estimates. |
|
|
South Carolina |
Personal income tax collections are down 1.8% year to date. |
Corporate income tax collections are down 11.8% year to date. |
Sales tax collections are up 4.9% year to date. |
Total general revenues are up 0.05% year to date. |
|
South Dakota |
(N/A) |
Not available. |
Monthly sales tax collections are 5.8% more than they were compared with March 2002. Sales tax audits have been aggressive and have brought in more money than anticipated. |
Monthly collections from the contractor's excise tax are 31.1% more than a year ago and to date have increased by 9.7%.
Assuming overall taxes continue their historical trend for the remainder of the fiscal year, revenues could surpass the revised estimate by $5 million. |
|
Tennessee |
|
|
|
All major taxes are performing near estimate. |
|
Texas |
(N/A) |
(N/A) |
General sales tax collections are down. |
Motor vehicle sales tax collections are down. Franchise tax collections have yet to be recorded (occurs in May). |
|
Utah |
The personal income tax is on target. |
The corporate franchise tax is running better than projected by about 2.2%. |
The sales tax is on target. |
|
|
Vermont |
The personal income tax is running slightly below forecast. |
The corporate income tax is running slightly above forecast. |
Sales and use taxes are on target. |
Overall revenues are on target with forecasts. |
|
Virginia |
|
|
|
Major tax categories are performing slightly below the revised forecast made in December 2002. |
|
Washington |
(N/A) |
(N/A) |
The sales tax generally is on track. |
The property tax and business and occupation tax generally are on track. |
|
West Virginia |
The personal income tax is coming in at 76.6% of the March estimate (100.12% of the yearly estimate). |
(N/R) |
Sales taxes are lagging the estimate by $13 million. |
|
|
Wisconsin |
(N/R) |
(N/R) |
(N/R) |
The status of FY 2003 revenue collections and current 2003-2005 estimates will be reviewed again in May. |
|
Wyoming |
(N/A) |
(N/A) |
Sales and use taxes are 0.4% below estimated levels. |
Federal mineral royalties are 10.4% ahead of estimate, investment income is 26.5% below and all other sources are 0.2% above. The state has not yet seen revenue from the highest priced months for natural gas and oil, so mineral revenues will be higher. Overall, final collections are expected to exceed estimates. |
|
District of Columbia |
The personal income tax is under-performing. |
The corporate income tax is under-performing. |
(N/R) |
|
|
Key:
(N/A) = Not applicable
(N/R) = No response |
|
Note: Puerto Rico did not respond to this survey. |
|
Source: National Conference of State Legislatures survey of legislative fiscal offices, April 2003. |
|
Table 4. FY 2003 Budget Overruns |
|
State/ Jurisdiction |
Yes |
No |
Notes |
|
Alabama |
|
x |
|
|
Alaska |
x |
|
Medicaid and fire suppression. |
|
Arizona |
x |
|
Medicaid (already provided Title 19 Medicaid supplementals). |
|
Arkansas |
|
x |
|
|
California (N/R) |
|
|
|
|
Colorado (N/R) |
|
|
|
|
Connecticut |
x |
|
Medicaid is the largest account in deficiency ($82.5 million). |
|
Delaware |
|
x |
|
|
Florida |
|
x |
|
|
Georgia |
x |
|
Medicaid. |
|
Hawaii |
x |
|
Medicaid ($23 million). |
|
Idaho |
|
x |
|
|
Illinois |
x |
|
Medicaid and group insurance. |
|
Indiana |
|
x |
|
|
Iowa |
x |
|
Medicaid. |
|
Kansas |
x |
|
Medicaid. |
|
Kentucky |
x |
|
Medicaid benefits and corrections. |
|
Louisiana |
x |
|
Medical costs for prisoner care ($17 million), sheriff's housing of state inmates ($8 million), state match for federal disaster aid ($34 million), minimum foundation program ($23 million) and tuition opportunity program ($8 million). |
|
Maine |
x |
|
The second emergency budget bill for FY 2003 included $5.2 million for correctional institution health insurance contracts and correctional institution salary and benefit costs. It also provided about $10 million in additional funds for Medicaid programs. |
|
Maryland |
x |
|
Mental health services ($30 million), human resources overestimated federal fund attainment ($25 million), various public safety and state police spending ($14.4 million), foster care ($4.9 million), non-public special education placements ($4.4 million) and other ($7.7 million). |
|
Massachusetts |
x |
|
Medicaid, snow and ice removal. |
|
Michigan |
|
x |
No program is over budget as yet, but the Senate Fiscal Agency is examining the need for a supplemental appropriation for Medicaid. |
|
Minnesota |
|
x |
|
|
Mississippi |
x |
|
Medicaid, corrections and the Department of Human Services need additional funding. |
|
Missouri |
x |
|
Medicaid. |
|
Montana |
|
x |
|
|
Nebraska |
x |
|
Homestead exemption program, correctional inmate medical services costs, child welfare, Aid to Dependent Children and state ward education. |
|
Nevada |
x |
|
A supplemental appropriation will be required to finance projected costs for Medicaid. |
|
New Hampshire |
x |
|
Medicaid. |
|
New Jersey |
x |
|
The state has approximately $790 million of additional spending needs in FY 2003 (compared to a more normal year where there might be $300 million to $400 million). Most of the difference is not due to program overspending, per se, but to underbudgeting for Medicaid nursing home reimbursement and New Jersey's low-income senior and disabled resident prescription drug program, on the assumption the federal government would assume these costs (under a state IGT appeal and a Medicaid section 1115 waiver application). So far, neither has occurred, and it was necessary to apprpriate or transfer state funds (roughly $400 million) from other areas. Other areas significantly over budget include county solid waste debt assistance, retiree medical benefits, supplemental school aid for special needs districts, Medicaid inpatient hospital costs and emergency snow removal. |
|
New Mexico |
x |
|
Medicaid. |
|
New York |
x |
|
Medicaid. |
|
North Carolina |
|
x |
|
|
North Dakota |
x |
|
Medicaid. |
|
Ohio |
x |
|
Medicaid and disability assistance. |
|
Oklahoma |
|
x |
|
|
Oregon |
x |
|
Human services and public safety caseloads have not been fully funded requiring program reductions; all program areas of the budget have been reduced with resulting service elimination because of the revenue shortfall. |
|
Pennsylvania |
|
x |
|
|
Rhode Island |
x |
|
Mental health services, human services, corrections and K-12 education. |
|
South Carolina |
x |
|
Department of Corrections ($27 million), State Law Enforcement Division ($2.1 million), Tax Relief Trust Fund ($9.9 million) and tuition and scholarships ($2.6 million). |
|
South Dakota |
x |
|
Medicaid ($8.5 million) and corrections ($2.6 million). |
|
Tennessee |
x |
|
TennCare. |
|
Texas |
x |
|
Medicaid and Children's Health Insurance Program. |
|
Utah |
|
x |
|
|
Vermont |
x |
|
Corrections was taken care of in a supplemental appropriation. Social and Rehabilitative Services and child welfare may be running high. At present, these are not being addressed because overages exist only as possibilities. |
|
Virginia |
x |
|
Medicaid and personal property tax relief. |
|
Washington |
|
x |
The Legislature adopted a 2003 supplemental budget that added $135 million of spending authority to the general fund budget for 2001-2003. |
|
West Virginia |
x |
|
Medicaid ($40 million). |
|
Wisconsin |
x |
|
Shortfalls in medical assistance, Badger Care and corrections were addressed as part of the 2003 Act 1 fix-up legislation. |
|
Wyoming |
|
x |
|
|
District of Columbia |
x |
|
Medicaid and overtime for public safety. |
|
Total |
34 |
15 |
|
|
Note: Puerto Rico did not respond to this survey. |
|
Source: National Conference of State Legislatures survey, April 2003. |
|
Table 5. FY 2004 Budget Gaps |
|
State or Jurisdiction |
Gap Projected in Late January |
Highest Projected Gap |
Current Estimated Gap |
|
Dollars in Millions |
Percentage of General Fund Budget |
Dollars in Millions |
Percentage of General Fund Budget |
Dollars in Millions |
Percentage of General Fund Budget |
|
Alabama* |
(N/R) |
(N/R) |
(N/R) |
(N/R) |
(N/R) |
(N/R) |
|
Alaska* |
$896.0 |
36.0% |
$896.0 |
36.0% |
$600.0 |
25.0% |
|
Arizona |
$1,500.0 |
25.0% |
$1,500.0 |
25.0% |
$1,500.0 |
25.0% |
|
Arkansas |
$0.0 |
0.0% |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
California* |
$26,100.0 |
30.0% |
$26,100.0 |
30.0% |
$17,500.0 |
20.6% |
|
Colorado |
$398.0 |
6.5% |
$398.0 |
6.5% |
$869.0 |
15.0% |
|
Connecticut* |
$1,900.0 |
14.0% |
$1,942.3 |
14.2% |
$902.7 |
6.9% |
|
Delaware* |
$196.1 |
7.7% |
$196.1 |
7.7% |
$120.0 |
5.0% |
|
Florida* |
(N/R) |
(N/R) |
$0.0 |
0.0% |
$0.0 |
0.0% |
|
Georgia |
$721.0 |
4.9% |
$735.0 |
5.0% |
$735.0 |
5.0% |
|
Hawaii |
$80.0 |
2.0% |
$110.0 |
2.9% |
$110.0 |
2.9% |
|
Idaho |
$160.0 |
8.8% |
$160.0 |
8.8% |
$160.0 |
8.8% |
|
Illinois* |
$3,500.0 |
13.2% |
$3,600.0 |
13.6% |
$3,600.0 |
13.6% |
|
Indiana |
(N/R) |
(N/R) |
$750.0 |
7.0% |
$750.0 |
7.0% |
|
Iowa* |
$413.8 |
9.3% |
$413.8 |
9.3% |
$0.0 |
0.0% |
|
Kansas* |
$750.0 |
16.7% |
$980.0 |
21.8% |
$230.0 |
5.1% |
|
Kentucky* |
(N/R) |
(N/R) |
$198.2 |
2.7% |
$0.0 |
0.0% |
|
Louisiana |
$600.0 |
8.5% |
$600.0 |
8.5% |
$600.0 |
8.5% |
|
Maine* |
$475.0 |
16.3% |
$486.5 |
16.7% |
$0.0 |
0.0% |
|
Maryland* |
$853.2 |
7.8% |
$853.2 |
7.8% |
$0.0 |
0.0% |
|
Massachusetts* |
$3,000.0 |
13.0% |
$3,000.0 |
13.0% |
$2,700.0 |
10.8% |
|
Michigan* |
$1,250.0 |
14.0% |
$1,250.0 |
14.0% |
$0.0 |
0.0% |
|
Minnesota* |
$2,367.0 |
15.0% |
$2,375.7 |
15.5% |
$2,375.7 |
15.5% |
|
Mississippi* |
(N/R) |
(N/R) |
$90.0 |
2.5% |
$0.0 |
0.0% |
|
Missouri |
$1,000.0 |
15.0% |
$1,000.0 |
15.0% |
$700.0 |
10.5% |
|
Montana |
$116.0 |
8.3% |
$116.0 |
8.3% |
$116.0 |
8.3% |
|
Nebraska* |
$350.0 |
13.0% |
$380.0 |
13.6% |
$380.0 |
13.6% |
|
Nevada* |
(N/R) |
(N/R) |
(N/R) |
(N/R) |
(N/R) |
(N/R) |
|
New Hampshire |
$148.0 |
6.0% |
$148.0 |
6.0% |
|
