State Budget Update: fall 2013
Four and half years after the end of the Great Recession, state budget recovery remains a work in progress. Although fiscal conditions have improved and revenue collections are meeting projections, the recovery has been painfully slow. According to a recent report from Standard & Poor’s, the U.S. annual growth rate has averaged just 2.3 percent over the past four years, which is half the historic average annual growth over the past 50 years.
These economic doldrums have led to modest state revenue recovery in most areas of the country. This situation—and expectations for more of the same—has important implications for state finances. Although budget gaps are rare and policymakers may have some added flexibility to deal with spending overruns or other unexpected developments, there appears to be little room for major new policy initiatives.
Overall, state budgets appear to be stabilizing and settling into a period of modest growth.
This report is based on data collected in the fall of 2013 from legislative fiscal officers in all 50 states and the District of Columbia. It includes information on:
- State revenue performance;
- Areas of spending over budget; and
- A summary of state fiscal situations