state budget update: m h 2010march 2010 - ncsl

State Budget Update:M h 2010March 2010

Fiscal Affairs Program

OverviewThe steep drop in state revenues appears to be p p ppsubsiding.

Despite revenue improvement, many states face sizeable budget gaps.

To date, states have reported a total estimated budget gap of $531.4 billion (FY 2008 through FY 2013).

FY 2010 P l I T C ll i *FY 2010 Personal Income Tax Collections*

Above Target 5Above Target, 5(0 , 1 )No personal

income tax, 8

On Target, 11(9 , 1 )

Below Target, 25Below Target, 25(11 , 2 )

*Compared to the latest Estimateforecast increased; forecast reduced

Arizona and New York did not provide this information. Source: NCSL survey of state legislative fiscal offices, March 2010.

FY 2010 G l S l T C ll i *FY 2010 General Sales Tax Collections*

No generalAbove Target, 7

(1 , 1 )

No general sales tax, 5

On Target, 12(6 , 3 )

Below Target, 24(10 , 1 )( , )

*Compared to the latest Estimate. forecast increased; forecast reduced

Arizona, New York and South Dakota did not provide this information. Source: NCSL survey of state legislative fiscal offices, March 2010.

FY 2010 C I T C ll i *FY 2010 Corporate Income Tax Collections*

No corporate

Above Target, 11(1 , 4 )

income tax, 4

Below Target, 18

On Target, 15(3 , 7 )

g ,(9 , 1 )

( , )

*Compared to the latest Estimate ; forecast increased; forecast reduced

Arizona, New York and South Dakota did not provide this information. Source: NCSL survey of state legislative fiscal offices, March 2010.

FY 2010 O h T C ll i *FY 2010 Other Tax Collections*

Above Target, 8(1 , 0 )

No response, p22

On Target, 12(4 , 5 )( , )

Below Target, 9Below Target, 9(5 , 1 )

*Compared to the latest Estimateforecast increased; forecast reduced

Source: NCSL survey of state legislative fiscal offices, March 2010.

Projected FY 2010 Revenues Compared toAK

Projected FY 2010 Revenues Compared to FY 2009 Collections

OR

WA

ID

MT ND

MN

WINY

ME

VTNH

MA

RI

HI

CA

ID

NV

WY

UTCO

SD

NE

KS

IA

MI

ILIN OH

VAWV

PA

RI

CT

NJ

DE

MDCA CO

AZNM

KS

OK

MO

AR

KY

MS AL GA

SC

NC

MD

TN

TX LA

MS AL

FL

Higher n = 9

Flat n = 1

Lower n = 40Puerto Rico

Source: NCSL survey of state legislative fiscal offices, 2009.

Unknown n = 1

P j d FY 2011 R C dAK

Projected FY 2011 Revenues Compared to FY 2010 Collections

OR

WA

ID

MT ND

MN

WIMI

NY

ME

VT

NH

MA

RI

HI

CA

ID

NV

WY

UTCO

SD

NE

KS

IA

MI

IL IN

OH

VAWV

PA

RI

CT

NJ

DE

MD CA CO

AZ NM

KS

OK

MO

AR

KY

TN

MS AL GA

SC

NC

MD

TX LA

MS AL

FL

Puerto Rico

Higher n = 42

Flat n = 4

Lower n = 5

Source: NCSL survey of state legislative fiscal offices, March 2010

Unknown n = 0

l kAK

NH

State Revenue Outlook for FY 2011

OR

WA

ID

MT ND

MN

WIMI

NY

MEVT

NH

MA

RI

HI

CA

ID

NV

WY

UTCO

SD

NEIA

MI

IL IN

OH

VAWV

PA

RI

CT

NJ

DE

MD CA CO

AZ NM

KS

OK

MO

AR

KY

TN

MS AL GA

SC

NC

MD

TX LA

MS AL

FL

Puerto Rico

Stable n = 14

Concerned n = 34

Pessimistic n = 3

O i i i 0

Source: NCSL survey of state legislative fiscal offices, March 2010

Optimistic n = 0

AK Pre-Enactment FY 2011 Budget Gapsas a Percentage of General Fund Budget

OR

ID

MT10.8%

WA8.3%

ND

MN25.5% WI

MI

NY15 3%

ME21.6%VT, 22.0%

NH 8.3%

MA, 40.8%

RI 15 1%

HI22.7%

CA

ID

NV45 0%

WY

UT15.8% CO

SD

NE4.7%

KS

IA19.6%

MI13.0%

IL45.0% IN

9.0%

OH2.2%

VA13 9%

WV5.0%

PA

15.3% RI, 15.1%

CT, 4.1%

NJ, 33.0%

DE, 9.6%

MD, 17.2%CA13.4%

45.0% 5

AZ30.0%

CO6.1%

NM6.0%

KS8.7%

OK15.4%

MO

AR

KY, 4.5%

TN, 13.1%

MS AL GA

SC11.1%

NC7.2%

13.9% MD, 17.2%

TX10.6%

LA11.1%

MS AL

FL10.0%

6.9%

10% to 19.9%, n = 16

5% to 9.9%, n = 10

0.1% to 4.9%, n = 4 Puerto Rico, 11.1%

More than 20% n= 9Not applicable or not reporting, n = 12



OR13.4%

WA

ID

MT10.8%

ND

MN19.5% WI

MI

NY21 4%

MEVT, 8.0%

NH

MA

RI 11 1%

HI30.7%

CA

ID8.3%

NV

WY

UTCO

SD

NE8.7%

KS

IA14.5%

8.3% MI

ILIN

OH

VA14 4%

WV

PA

21.4% RI, 11.1%

CT, 20.1%

NJ

DE

MD, 15.1%CA20.1%

CO5.2%

AZ12.5%

NM4.8%

KS10.6%

OK

MO

AR

KY, 8.3%

TN, 0.4%

MS AL GA

SC25.9%

NC10.2%

14.4% MD, 15.1%

0 1% t 4 9% 2

TX12.4%

LA22.3%

MS AL

FL

13.0%

Puerto Rico, 5.5%10% to 19.9%, n = 13

5% to 9.9%, n = 7

0.1% to 4.9%, n = 2

More than 20% n= 6G i i d b k 4


Not applicable or not reporting, n = 19

Gap anticipated but amount unknown, n = 4


OR13.4%

WA

ID

MT9.2%

ND

MN10.2% WI

MI

NY25 2%

MEVT, 6.0%

NH

MA

RI 12 3%OR13 4%

HI35.9%

CA

ID

NV

WY

UTCO

SD

NE8.7%

KS

IA

8.4% MI

ILIN

OH

VAWV

PA

25.2% RI, 12.3%

CT, 18.8%

NJ

DE

MD, 13.2%

13.4%

CA20.1%

CO

AZ6.7%

NM

KS

OK

MO

AR

KY

TN, 0.2%

MS AL GA

SC27.2%

NC

MD, 13.2%

0 1% to 4 9% n 1

TX12.4%

LA21.9%

MS AL

FL

Puerto Rico, 10% to 19.9%, n = 5

5% to 9.9%, n = 5

0.1% to 4.9%, n = 1

More than 20% n= 6G i i d b k 4


Not applicable or not reporting, n = 30Gap anticipated but amount unknown, n = 4

St t B d t G FY 2002 FY 2013 ( j d)

$170$180$190

$174.1

State Budget Gaps FY 2002-FY 2013 (projected)

Amount Before Budget Adoption

$28.2

$110$120$130$140$150$160

rs

$117.3

Amount After Fiscal Year Began

Projected Amount

$145.9$29.9

$5.3

$

$77.0

$50$60$70$80$90

$100$110

ions

of D

olla

r

$79.0

$83.7

$37.0

$49.1$78.4

$36.3 $26.9$40.3

$89.0$73.5 $64.7

$37.2

$0.7

$12.8$0$10$20$30$40$50

Bill

i

No estimate

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

Fiscal Year43 states 45 states 42 states 33 states 26 states 1 state 20 states* 44 states* 49 states* 39 states* 28 states** 17 states***

* Includes Puerto Rico ** 31 states and Puerto Rico forecast FY 2012 gaps. The amount shown for FY 2011 indicates the 28 states that provided gap amounts. *** 21 states forecast FY 2013 gaps. The amount shown for the FY 2012 indicates the 16 states that provided gap estimates.

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

Budget Gap NumbersBudget Gap NumbersPast and Current Recession

Past Recession Current RecessionPast Recession Current Recession

Fiscal Year Amount(in Billions)

Fiscal Year Amount(in Billions)

2002 $37 2 2008 $12 82002 $37.2 2008 $12.8

2003 $79.0 2009 $117.3

2004 $83.7 2010 $174.1*

2005 $37.0 2011 $89.0**

2006 $26.9 2012 $73.5**

2013 $64.7**

Total $263.8 Total $531.4*Past Recession: March 2001 to November 2001 (8 months)Current Recession: Began December 2007 to Q3 of 2009? (20-21 months)Great Depression August 1929 to March 1933 (43 months)

b d d d d fGray bar denotes end/projected end of recession*Preliminary figure** Projected figure

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

A f S di Si ifi l OArea of Spending Significantly Over Budget in FY 2010g

28 states reported spending overruns

Medicaid: 21 states and PR

Other social services: CT, KS, MD, MT, NH, OR, NJ, VT, WA

Prisons/public safety: LA, MD, SC, TX, VT, WA

K-12 education: LA, MD, WA


A i Add L f ARRAActions to Address Loss of ARRA Fundingg

Fewer than half the states have taken action

Lowered spending base: 12 states

Raised revenue: FL, NM, UT, WA, VA

Tagged money as one-time with no plans to replace it: AR, MO, ND, TX

Focusing on streamlining/efficiencies: LA, ME, WV, VT (Challenge for Change Initiative)


A i Add L f ARRAActions to Address Loss of ARRA Funding (cont.)g

Used one-time money: IA, SC, UT

Extending funding period for pension contribution: AL (pending), VA

Established commission on highway funding: NH

Proposed stimulus reserve fund: PA

Assumes Congressional action: IL

Hiring and salary freeze: TN


A i Add L f ARRAActions to Address Loss of ARRA Funding (cont.)g

Created public-private partnership: PR

Exploring ideas: KS, OH

No actions to date: 9 states

No response: 6 states

Budget still under deliberation: 4 statesg


Conclusion

Revenue forecasts are starting to show year-over-year hgrowth.

Many forecasts offer little room for error.

Many states face at least two more years of budget gaps.

Few states have concrete plans to address the end of ARRA funding.

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state budget update: m h 2010march 2010 - ncsl

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