This report summarizes the results of a survey of legislative fiscal offices in the 50 states, the District of Columbia and the U.S. territories on the condition of state budgets.
The survey asks for information regarding state general fund revenues and expenditures, rainy-day-fund balances, as well as detailed information on states’ four major spending categories—K-12 education, higher education, corrections and Medicaid. NCSL received responses from 48 states and the District of Columbia. The two states that are not reported, Connecticut and Wisconsin, had not enacted a fiscal year 2018 budget at the time this report was written.
As in recent years, state budget conditions are stable overall. Since the end of the Great Recession, states have experienced a slow and steady rebound in state revenues. For FY 2018, states anticipate that trend to continue with average projected general fund revenue growth of 3.9 percent. As states closed their books on FY 2017, average general fund revenue growth was estimated at a modest 1.9 percent.
While slow revenue growth has allowed states to balance their budgets, many noted a small margin for error between FY 2018 revenue estimates and appropriations. Several states, including Alaska, Missouri and Ohio, report weak revenue growth and/or program costs that continue to grow. Other states, such as Iowa and Indiana mention slow revenue growth as a concern, but also note that the state has built up substantial reserves.
A handful of states, including Idaho, Georgia and Utah, are optimistic about their state’s fiscal conditions. Some energy-dependent states are also seeing more cause for optimism, with New Mexico, West Virginia and Wyoming noting that oil and gas and other severance tax revenues are slightly stronger than expected.
Overall, states continue to chart a course of modest growth, while increasing spending pressures and slow revenue growth are causing some concern and keeping state budgets tight.