Alabama
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Stable. Budgets are experiencing revenue growth, but lower than pre-COVID. Impact has been less than originally anticipated.
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Alaska
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Alaska faces a roughly $900 million deficit in FY 2021 and the Governor's FY 2022 budget proposal has a $2 billion deficit. FY21 represents the ninth straight year Alaska has run a budget deficit, and our budget reserves have declined from $16 billion to under $1 billion. The governor fills his deficit with an overdraw of the Alaska Permanent Fund, which is unsustainable. Alaska still has a massive structural budget deficit and further budget reductions are unlikely to meaningfully close the gap.
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Arizona
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Ongoing revenues for FY 2021 and FY 2022 from the latest January 2021 forecast are generally performing consistent with estimates made in the FY 2021 budget approved in March 2020, which assumed a sizable ending balance for FY 2021 to help pandemic-related shortfalls. Combined with strong FY 2020 revenues (after adjusting for the deferral of the income tax filing deadline into FY 2021) and savings from the enhanced federal Medicaid match rate), the state's cash balance is strong and ongoing balance estimates are also positive.
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Arkansas
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The current general revenue forecast is $212.3 million below the total amount authorized by the General Assembly. Actual collections for the first six months have consistently trended above forecast (plus $319 million to date) which allows for the possibility of an upward revision if that trend continues.
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California
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The state’s fiscal situation has continued to rapidly evolve since the beginning of the coronavirus disease 2019 (COVID-19) pandemic last year. Although the state economy abruptly ground to a halt in the spring with the emergence of COVID-19, it has experienced a quicker rebound than expected. While negative economic consequences of the pandemic have been severe, they do not appear to have been as catastrophic from a fiscal standpoint as the budget anticipated. The governor's budget anticipates the state has a one-time $15.5 billion windfall available to allocate in 2021-22 and, since that was released, revenue collections have continued to exceed January expectations by billions of dollars.
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Colorado
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Budget cuts enacted during the 2020 session have proven more severe than necessary to accommodate the revenue decrease experienced during FY 2021 to date. Executive and legislative decisionmakers are advocating for more relief and stimulus to households and businesses, and for increasing appropriations to offset some of the cuts. However, uncertainty remains elevated in advance of the tax year 2020 filing season, and budget writers will need to contend with the absence of CRF moneys in FY 2022, barring additional federal support.
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Connecticut
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While we still have structural balance issues to address for the upcoming biennium, our revenue picture has been surprisingly strong.
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Delaware
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Fiscal Year 2021 projections were adjusted upward, primarily due to previous over-estimations on the negative impacts associated with coronavirus. Revenue growth includes upward trends in corporate franchise and unclaimed property revenues. The state continues to be proactive in managing its operational expenses, adhering to its constitutional 98% appropriation limit.
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District of Columbia
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Local source revenue for FY 2020 is $163.3 million (2.0%) below the FY 2019 revenue level and is expected to drop an additional $257.3 million (3.2%) in FY 2021, as the COVID-19 public health emergency continues to disrupt significant parts of the District economy. Revenue is expected to return to the FY 2019 level in FY 2022 as vaccines are deployed and the economy recovers.
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Florida
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Specific reserve funds have not needed to be used so far. Revenue estimates are improving compared to the initial estimates that included the impact of COVID-19.
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Georgia
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Georgia remains cautiously optimistic. Deep cuts were made in the original FY 2021 budget. Because of prudent management and better than anticipated revenues, the governor is increasing the state general fund budget by 2.5% in Amended FY 2021 and 5.1% in FY 2022. The increased revenue allows the state to partially backfill deep cuts made in the K-12 education budgets in both the current year as well as FY 2022 as well as reductions to Medicaid in FY 2022; the governor has also recommended significant investments in rural broadband and infrastructure while budgets for other agencies, particularly public safety and mental health, remain relatively flat.
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Hawaii
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Revenues are not projected to reach FY 2019 until FY 2024. As a result, severe shortfalls exist in the six-year planning period, starting with -$2.2 billion in the upcoming biennium; growing to -$7.1 billion in the following biennium.
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Idaho
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The current fiscal situation is good to strong. We have exceeded monthly revenue forecasts for the first seven months of the fiscal year and are cautiously optimistic until our April revenues are known. We are in a situation to seriously discuss tax relief.
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Illinois
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Despite economic measures and resulting base revenues performing ahead of schedule relative to when the budget was originally passed, financial challenges will continue well into the next several fiscals years.
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Indiana
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In December 2020, Indiana revenues for the current biennium (FY 2019-21) were revised downward by about $954 million or 2.8% below the December 2019 (pre-COVID) forecast. State Budget Agency reports that the reversion targets for the biennium were increased from a pre-COVID target of $50 million to $676 million. Also in FY 2020, $291 million of general fund appropriation towards university capital projects were withheld. The drop in revenues offset by reduction in expenditure will result in a relatively small drop in the total general fund combined balance at the end of current biennium. On June 30, 2021, General Fund combined balances are projected to be at 13.7% of total current year resources. The General Assembly is meeting starting January through April, to consider a budget for the next biennium. The revenues for the next biennium are forecasted to be $5.6% above the revenues for the current biennium which was impacted by COVID-19. The fiscal stability remains tied to the COVID-19 related economic uncertainty.
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Iowa
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Iowa's current financial system is sound. The projected General Fund surplus for FY 2021 is $436.7 million and the balances in the state's two reserve funds total $783.7 million, which is the statutory maximum. In addition, Iowa also has a Taxpayer Relief Fund with a balance of $90.2 million, which can be used at the discretion of the General Assembly and the governor. Together, these three sources (which are derived from the general fund surplus) total $1.311 billion and is approximately 16.4% of the FY 2021 general fund revenue estimate.
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Kansas
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Kentucky
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Revenue growth has exceeded the estimate through first half of fiscal year which will provide a cushion for uneven growth in the last half of the fiscal year.
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Louisiana
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The current fiscal situation is better than previously expected, although the economy is tenuous and vulnerable to shocks.
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Maine
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Maryland
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Although both revenues and spending are below estimates from the 2020 session, the governor's proposed budget for fiscal 2022 estimates a closing cash surplus of $265 million in fiscal 2021. The availability of $30 billion in estimated federal assistance has allowed for general fund operating savings and the ability to consider over $600 million in tax relief to assist individuals and businesses impacted by the COVID-19 pandemic.
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Massachusetts
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While Massachusetts continues to combat the pandemic, our economy has continued to demonstrate buoyancy and strength in certain categories. The governor has upgraded our tax revenue assumptions for the year twice ($459 million and $700 million) since the Legislature submitted our budget to him. We remain cautiously optimistic that these revenue trends will hold.
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Michigan
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The state's current fiscal situation is better than anticipated at the outset of the COVID-19 pandemic. Mid-year spending reductions to FY2019-20 appropriations, coupled with revenue collections above projections, have afforded the state a sizable year-end balance to carry into the current fiscal year. Though revenue forecasts illustrate reductions in revenue from FY 2019-20 into FY 2020-21, the sizable balances, and one-time increases in federal COVID-related funding have assisted in offsetting revenue losses. Revised revenue projections suggest revenue growth starting in FY 2021-22 nearly returning collections to pre-pandemic levels.
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Minnesota
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Minnesota's budget situation has improved significantly from the projections in May. Minnesota releases a budget forecast in February and November. In 2020 a special forecast update was released in early May because of the pandemic. The February 2020 forecast projected a $1.5 billion balance for the FY 2020-21 biennium with spending of $48.4 billion. The May update reduced that balance by $3.9 billion to a negative $2.4 billion. In the November 2020 budget forecast that balance improved by $2.9 billion to a positive $636 million. (There were also relatively minor spending changes enacted in this period as well.) Since that November forecast another $242 million in spending has been enacted so the current general fund balance projected on June 30, 20021 is $394 million.
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Mississippi
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Continued modest growth projected for FY 2021 and beyond.
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Missouri
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The general revenue fund balance has been buttressed by FY 2020 withholds of $428.2 million, the current FY 2021 withholds of $282.8 million, and various Coronavirus Relief Fund expenditures that would otherwise be general revenue fund expenditures had the CARES Act not passed. The governor has also noted that Missouri’s economic position is better than expected. That said, the full impact of the COVID-19 pandemic still remains an unknown.
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Montana
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We have solid reserve balances, but federal stimulus impacts and economic uncertainty may adversely impact revenues in the coming months.
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Nebraska
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The general fund financial status at sine die last August estimated a budget shortfall over $750 million for the FY22-FY23 biennium, but general fund receipts and budget savings have led to a current anticipated general fund financial status with nearly $50 million above the minimum reserve. Net receipts for FY21 have exceeded the certified forecast in August, as well as the forecast in October, which was revised upward from the certified forecast.
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Nevada
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Based on the COVID pandemic and related orders by the governor to reduce capacity, Nevada's leisure and hospitality industry has experienced a decline in business activity, which has translated to reductions in general fund revenue to support the operation of state government. The impact of the COVID pandemic and potential recovery has been considered by the Economic Forum in its revenue forecast. Nevada will be observing the rollout of the COVID-19 vaccine closely in projecting the resumption of tourist travel, particularly to southern Nevada. This information will be considered again by the Economic Forum at its May 4, 2021 meeting.
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New Hampshire
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The state budget variance at the end of FY 2020 was $-81.5 million below original budget projections. FY 2021 revenue through December is $54.3 million ahead of plan, however March and April are large revenue months, and revised agency revenue estimates indicate an additional revenue shortfall is possible. Spending trends for the remainder of the year coupled with the governor's expenditure restrictions will be key to addressing any potential shortfalls. Further legislative action may be necessary prior to the close of the fiscal year.
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New Jersey
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The current fiscal situation is stable.
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New Mexico
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Revenues declined less than expected in fourth quarter of FY 2020 and first half of FY 2021. The final quarter of FY 2020 was largely propped up by federal stimulus measures, including the income supports for those unemployed, stimulus checks, PPP loans, and various other forms of relief. Additionally, employment did not decline as much as expected. Heading into FY 2021, recovering oil prices are driving up expected receipts from severance taxes and federal royalty payments, and the state's economic outlook has improved from the prior forecast in terms of employment, wages/salaries, and disposable income. The state's fiscal restraint heading into FY 2021 has provided an improved general fund fiscal outlook, and the state's reserves remain strong due to stress testing measures implemented in the last few years to plan for economic downturns and oil market shocks.
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New York
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North Carolina
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With revenues significantly surpassing expectations the fiscal situation has improved considerably.
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North Dakota
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State revenues have declined due to the pandemic, oil price declines, and the decline in demand for oil. North Dakota is anticipated to finish this biennium with a positive ending balance; however, there is much uncertainty regarding the level of future state revenues as the Legislative Assembly develops the 2021-23 biennium budget.
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Ohio
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General fund tax revenue through December was $458 million (3.7%) above estimate, while expenditures were $710 million (3.6%) below estimate.
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Oklahoma
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Based on the revenue performance year-to-date there is optimism that FY 2021 will not be affected by any sudden downturn unless it is very severe. There is a substantial cash balance built up in the general revenue fund to further provide for the complete funding of agencies for the balance of the year.
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Oregon
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Pennsylvania
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Tax payments shifted into FY 2020-21 and stronger than expected revenue performance created an improved fiscal outlook for FY 2020-21. If revenue and expenditures patterns continue as forecast, the Commonwealth is projected to end the fiscal year with a $1.48 billion operating surplus. However, the FY 2020-21 budget includes the use of $3.4 billion in federal stimulus funds ($1.3 billion in one-time federal Coronavirus relief funds and $2.07 billion in enhanced federal matching funds for medical assistance). These expenditures will need to be replaced with general fund dollars in future fiscal years.
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Rhode Island
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The current situation is fragile. The FY 2021 budget was designed to provide near-term stability by maintaining current services and opting against fee and tax increases. The current FY 2022 revenue forecast will not support a similar budget, setting the stage for more difficult decisions in the coming months.
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South Carolina
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All constitutionally required reserve funds are fully funded. The state is experiencing modest economic growth.
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South Dakota
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Revenues have come in higher than projected so the state has many one-time dollars available.
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Tennessee
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Tennessee's fiscal situation appears very stable. While unemployment is still 2% higher than before COVID and tourism has taken a big hit with hospitality still down 38% and restaurants/ bars down 9%, there are 200,000 job openings listed on Jobs4TN.gov.
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Texas
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Texas's current fiscal situation is substantially balanced, primarily due to revenue collections not falling as much as anticipated last summer and federal funds from the various pieces of legislation adopted by the U.S. Congress in response to the COVID-19 pandemic. In addition, Texas continues to have a substantial Economic Stabilization Fund, estimated to total $11.6 billion at the end of the upcoming budget cycle.
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Utah
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We believe federal stimulus propped up our economy, therefore we are treating a significant portion of revenue growth as one-time.
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Vermont
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FY 2021 and FY 2022 appear stable, in FY23 and beyond, structural deficit is still predicted
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Virginia
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Washington
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The legislature will be adopting both a 21 Supplemental and a 21-23 Biennial budget. By statute, the budget must remain in balance for 23-25 assuming the policies funded in 21-23 were continued for another two years.
The pandemic has affected both sides of the state budget equation: expenditures are higher in many cases while revenues are lower than they were projected pre-pandemic. Compared to the March 2020 forecast, over the budget horizon, the state is still facing a multi-billion dollar decline in revenue. But that decline is about half what it was thought to be in June 2020.
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West Virginia
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Wisconsin
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Anticipated ending gross balance (surplus) of $1.85 billion for 2020-21.
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Wyoming
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The fiscal outlook for Wyoming has improved since the May 2020 Consensus Revenue Estimating Group forecast, acknowledging the extractive industries are volatile. With the reductions implemented and recommended by the governor, the budget for the general operations of state government is balanced. State funding for K-12 school districts continues to face a structural revenue-expenditure disconnect.
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Source: NCSL survey of legislative fiscal offices, winter 2021.
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