By Todd Haggerty and Erica Michel

While the rest of us can clean up after last night’s parties, lawmakers in Massachusetts and Pennsylvania are waiting to see what gubernatorial action will be taken on their state’s respective budgets for fiscal year (FY) 2015.

Those are the only two states without a budget in place at the start of the new fiscal year, which began today.

• View NCSL’s FY 2015 budget status map.

In Massachusetts, while the budget, which was passed by the legislature yesterday, awaits the governor’s signature, a temporary spending bill is already in place.

The Pennsylvania General Assembly passed the FY 2015 budget yesterday but the governor is withholding signature of the bill as he presses for changes to state employee pensions. The governor has 10 days to act on the budget bill or it becomes law without his signature. 

Generally speaking, without a budget in place state governments have no legal authority to spend and a state government shutdown may result.

Pennsylvania most recently experienced a government shutdown in 2007 due to a stalemate over the FY 2008 budget. The current impasse is not likely to result in any interruption of state services. Recent court rulings, including some as a result of the 2007 shutdown, have largely ensured that state employees will be paid and services will continue.

• Learn more about what happens when state budgets are late and how states try to encourage an on-time budget.

Considering the complexity, magnitude and sheer number of state budgets, it’s notable that late ones—and especially state government shutdowns—are rare. Since 2002, more than 20 states and territories have started a fiscal year without a finalized budget; in at least five of the states and in Puerto Rico, the lack of a budget resulted in a government shutdown. State lawmakers, although routinely faced with difficult revenue and spending decisions, pass budgets on time more often than not.

It can pay to pass an on-time budget too. For example, in New York—which has a history of late state budgets—the passage of an on-time budget for the fourth year in a row was cited as one of the factors for the state’s recent credit rating upgrade. 

Now, what are your New Fiscal Year’s resolutions?

Todd Haggerty and Erica Michel cover state budget issues for NCSL’s Fiscal Affairs Program.

Email Todd

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