50-State Government Relations Commentary and Insight

2012 Fiscal Survey of the States

By: Jeff Hartgen, MultiState Principal
June 14, 2012

Every year, the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO) jointly produce the “Fiscal Survey of the States”.  On June 12, 2012, the newest edition was released.  This document is a must-read, or at the very least, a “must skim” or “must download-for-future-reference” for those of us in the state government relations arena.

For those of you that love charts and graphs, the “Fiscal Survey of the States” is chock-full of them.  For those of you that are hard pressed for time, here is a brief summary of the Survey’s summary:

Showing the effects of the recession, FY 2012 projected total state general fund (GF) budgets are $683 billion, compared to $687 billion in FY 2008.  Twenty-five states have lower GF spending five years after the start recession, and 23 states have lower GF revenue projected for 2013. Interestingly, total state spending—which NASBO covers in a separate report—continued to rise throughout the recession as a result of increased federal aid to the states.

The NGA/NASBO report shows that 19 states are forecasting over $30 billion in budget shortfalls for the next fiscal year (FY13) and four have shortfalls totaling $3.1 billion for the current fiscal year.  Approximately $6.7 in proposed tax and fee increases are in the mix.

After being depleted for the most part over the last five budget cycles, state rainy day funds are being slowly replenished, with a total projected balance of over $53 billion in FY 2013.  Please keep in mind that over 50% of that comes from two states, Alaska and Texas.  Only nine states have a zero balance projected for FY 2013, down from 11 in FY 2012 and 14 in FY 2011.

The biggest GF challenge facing the states in the coming years will be Medicaid budgets.  According to the Survey, Medicaid in 2011 accounted for 23.6% of total spending.

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