New Report: State Budget Update

Posted by on August 25, 2008

State revenue shortfalls worse than expected

In a report with clear implications for education spending in the coming year, the National Conference of State Legislatures says the decline in states’ finances has proven to be worse than expected. Based on information from legislative fiscal directors through early July, the organization says more states have indicated gaps for the 2009 fiscal year than for 2008, with the cumulative difference between anticipated revenues and expenditures expected to triple — to more than $40 billion. According to the report, it’s unclear whether 2009 spending plans will remain stable, especially if Medicaid and other programs that tend to grow during economic downturns exceed budgeted levels. Moreover, the same revenue issues that undermined state budgets in fiscal 2008 can be expected to continue. All the same, not all states face fiscal challenges, says

William Pound, executive director of the legislatures group. “States that have significant portions of their tax bases tied to natural resources seem to have escaped major budget problems.”
Read the press release at http://www.ncsl.org/programs/press/pr0708StateBudgetfinal.htm