STATE BUDGET UPDATESTATE BUDGET UPDATEPresentation at the Presentation at the

Fiscal Analysts SeminarFiscal Analysts SeminarSalt Lake City, UtahSalt Lake City, Utah

Arturo PérezProgram Director

NCSL Fiscal Affairs Program

OverviewBetter state fiscal conditions

Few budget gapsg g pStronger revenue performanceRising year-end balances

State budgets remain vulnerableFederal deficit reduction actionsSpending pressuresSluggish economic recovery

Cumulative State Budget Gaps: FY 2002-FY 2014

$28.2$160

$180

$200

s

Amount Before Budget Adoption Amount After Budget Adoption Projected

$100

$120

$140

of D

olla

rs

$145.9

$ $91 0

$29.9

$5.3 $77.0$12.3 $6.8

$60

$80

$100

Bill

ions

o

$49.1$78.4

$36.3 $26.9$40.3

$83.9 $91.0

$37.2

$0.7

$12.8$32.2

$12.2$0

$20

$40

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

B

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: NCSL survey of state legislative fiscal offices, various years.

Revenue and Spending Growthp g

Source: NCSL survey of state legislative fiscal offices, summer 2012

State Year-End Balances FY 2007 to FY 2013 (projected)(p j )

12.0%12%

14%

ture

s

All Jurisdictions

4 8%

8.0%

%

8%

10%

%

GF

Expe

ndit

4.8%

2%

4%

6%

EB a

s a

% o

f

0%2006 2007 2008 2009 2010 2011 2012 2013

YE

Fiscal Year

All Jurisdictions

Source: NCSL survey of state legislative fiscal offices, various years.

State Year-End Balances FY 2007 to FY 2013 (projected)(p j )

11 0%10%

12%

ture

s

W/O: AK and TX

11.0%

6%

8%

10%

GF

Expe

ndit

1 8%

4.4%

2%

4%

EB a

s a

% o

f

1.8%0%

2006 2007 2008 2009 2010 2011 2012 2013

YE

Fiscal Year

W/O: AK and TX

Source: NCSL survey of state legislative fiscal offices, various years.

State Year-End Balances FY 2007 to FY 2013 (projected)(p j )

11.4%

10%

12%

ture

s

W/O: AK, CA, IL and TX

5.1%6%

8%

10%

GF

Expe

ndit

4.1%

5.1%

2%

4%

EB a

s a

% o

f

0%2006 2007 2008 2009 2010 2011 2012 2013

YE

Fiscal Year

W/O: AK, CA, IL and TX

Source: NCSL survey of state legislative fiscal offices, various years.

State Year-End Balances FY 2007 to FY 2013 (projected)(p j )

12.0%

11 0%

11.4%

10%

12%

14%

ture

s

4.8%

8.0%11.0%

5.1%6%

8%

10%

GF

Expe

ndit

1 8%

4.4%4.1%

5.1%

2%

4%

EB a

s a

% o

f

1.8%0%

2006 2007 2008 2009 2010 2011 2012 2013

YE

Fiscal Year

All Jurisdictions W/O: AK and TX W/O: AK, CA, IL and TX

Source: NCSL survey of state legislative fiscal offices, various years.

FY 2012 Year-End Balances(as a percentage of general fund spending)

AK

WA ME

O

(as a percentage of general fund spending)

MT ND

MN

IL NH

WI

PA

OR

OH

NY

WY

NEIA

MI

INWV

VT

SD

MN

NV

ID

CA

NJAR

KYMA

AZ

NC

WV

SC

RIHICO

UT

NM

KS

OK

MO

TN

VA

CT

GAMS

FL

DC10 percent or more 115% to 9.9% 19

DE

MDTX LA

AL

0.1% to 4.9% 17Zero balance 3Negative balance 2

Source: NCSL survey of state legislative fiscal offices, summer 2012

PR

State Economic Outlook for FY 2013

30

35 33

ctio

ns

20

25

30

s/Ju

risdi

c

10

15 117r o

f Sta

te

0

5 07

Num

be

Source: NCSL survey of state legislative fiscal offices, summer 2012

Pessimistic Concerned Stable Optimistic

AK State Economic Outlook for FY 2013WA ME

O

MT ND

MN

IL NH

WI

PA

OR

OH

NY

WY

NEIA

MI

INWV

VT

SD

MN

NV

ID

CA

CT

NJAR

KYMA

AZ

NC

WV

SC

RIHICO

UT

NM

KS

OK

MO

TN

VA

AL GAMS

FL

DC

DE

MDTX LA

Optimistic 7

Concerned 11

PR

Source: NCSL survey of state legislative fiscal offices, summer 2012

Stable 33

Top FY 2013 ChallengesTop FY 2013 Challenges

Recovery(recessionary impact on general fund revenue collections)(recessionary impact on general fund revenue collections)

$350

Recession of 1991

$250

$300

llars

$

$150

$200

illio

ns o

f Do

$0

$50

$100Bi

Source: NCSL survey of state legislative fiscal offices, various years.

$01 2 3 4 5

Recovery(recessionary impact on general fund revenue collections)(recessionary impact on general fund revenue collections)

$560

Recession of 2001‐02

$520

$540

olla

rs

$

$480

$500

lions

of D

o

$420

$440

$460Bil

Source: NCSL survey of state legislative fiscal offices, various years.

$4201 2 3 4 5

Weakovery(recessionary impact on general fund revenue collections)(recessionary impact on general fund revenue collections)

$670

The Great Recession

$640

$650

$660

lars

$610

$620

$630

llion

s of

Dol

$

$580

$590

$600Bi

Source: NCSL survey of state legislative fiscal offices, various years.

$5701 2 3 4 5

ConclusionState budgets are better positioned than in previous years

More Revenue FlexibilityMore Revenue Flexibility

Reserves are Rising

The Economic Outlook is Stable

ConclusionState budgets still face considerable challenges:State budgets still face considerable challenges:

L kl tFederal Actions Unemplo mentLackluster

Revenue Growth

Actions Unemployment

PensionsMedicaid

Pensions

For More Information NCSL Homepage:

www ncsl orgwww.ncsl.org

NCSL Budget & Tax Homepage:www ncsl org/fiscalwww.ncsl.org/fiscal

State Budget Update: Summer 2012 (available online)

State Tax Update: August 2012 (available online)

Th k YThank You