State budget issues, 2009-2010

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State budget and finance information
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State Information

State and local government budgets facedbudget challenges following the nationwide economic downturn that began in 2008. In Fiscal Year 2009, tax revenues were lower than expected.[1] A 2010 report by the Government Accountability Office reported the state local gap at $9.9 trillion.[2]

The Government Accountability Office said,

“… closing the fiscal gap over the next 50 years would require action to be taken today and maintained for each and every year going forward equivalent to a 12.3 percent reduction in state and local government current expenditures. Closing the fiscal gap through revenue increases would require action of a similar magnitude ….[3]”

A subsequent report by the National Governors Association and National Association of State Budget Officers found that FY2010 presented the most difficult challenge for states’ financial management since the Great Depression.[4]

In total, states faced a budget shortfall of $113.2 billion in FY 2009 and a projected shortfall of $142.6 billion in FY 2010.[5] The Government Accountability Office (GAO) said that state and local government could face a $10 trillion gap over the next several years.[6]

See also:Find your state budget

Declines in Spending

In FY2009, 43 states made a total of $31.3 billion in mid-year budget cuts, and 40 states made mid-year budget cuts to their fiscal 2010 budgetstotaling $22 billion.[4]

For FY2009, states expected to spend an estimated $1.59 trillion from all sources (general funds, federal funds, other statefunds and bonds). The general fund represented 41.7 percent ofthe total.[4]

Total State Spending for Estimated FY2009[4]

Category% of total state spending
Elementary and secondary education21.1%
Medicaid21.0%
Higher education9.8%
Transportation8.2%
Corrections3.3%
Public assistance1.6%
All other expenditures34.9%

Tax revenues in FY2008 amounted to $541.4 billion. They declined 11.8% to $477.4 billion in FY2010.[4] In FY2009, 41 states brought in revenue amounts below their projections.[4]

Rainy Day Funds

Because prior economic downturns resulted in lower than anticipated revenue collections, states established “rainy day” accounts during times of economic expansion. The accounts were intended to help stabilize budgets from future declines in tax collections that could disrupt state services.[4]

Total Year-End Balances as a Percentage of Expenditures, Fiscal 2009 to Fiscal 2011 (number of states)[4]NOTE: The average for fiscal 2009 (actual) was 4.7 percent

PercentageFiscal 2009 (Actual)Fiscal 2010 (Estimated)Fiscal 2011(Recommended)
Less than 1.0%111415
1.0% to 4.9%161617
5.0% to 9.9%141210
10% or more988

Federal Stimulus

Under theAmerican Recovery and Reinvestment Act of 2009 (ARRA), Congress awarded states and localities some $280 billion (35% of all stimulus dollars) to sustain employment, create jobs and promote economic activity and growth. About 85% of state and municipal outlays were designated for health, transportation, education and training programs. The federal share of total state spending increased from 26.3% in FY2008 to 30% in FY2009 due to the ARRA.[4]

In a Fiscal Survey of the States, the National Governors Association noted expectations of difficult state fiscal conditions for the next few years due to the loss of ARRA funds and anticipated slow recovery of state revenues.[4]

An accounting of stimulus funding by state was available at Recovery.gov, a Web site created by Congress as a repository for information related to stimulus spending.

TheGovernment Accountability Office also issued a report on state compliance with maintenance of effort requirements.[7]

Public employee salaries impact on state budgets

Total state expenditures exceeded $2.2 trillion last year, of which wages and benefits amounted to $1.1 trillion.[8]

States fulfill health care and pension obligations through direct contributions as well as investment earnings on those contributions. A fundamental formula for the sustainability of health care and pension funds is: Contributions + Investments = Benefits + Expenses.

States’ investment losses, which exceeded $800 billion in 2008, worsened the budgetary pressures of pension obligations. For example, the state ofIllinois borrowed $3.5 billion to meet its pension obligations. Estimates pegged the total unfunded liabilities of state and local pension plans between $1 trillion and $3 trillion.[9]

Charts

Fiscal Year 2010

The following chart lists state budget projections for the FY2010 as of October 9th, 2009[5][10] .


State budgetSpending TransparencyEstimated ShortfallEstimated Percent of General Fund Budget
Alabama budgetNo$1.2 billion[11]
Alaska budgetPartial$1.35 billion[5]31%[5]
Arizona budgetNo$1.4 billion[12]
Arkansas budgetNono shortfall[5]n/a[5]
California budgetNo$41.6 billion[13]
Colorado budgetNo$560.7 million[10]
Connecticut budgetNo$4.1 billion[5]22.2%
Delaware budgetNo$300 million[14]12.9%[5]
District of Columbia budgetNo
Florida budgetNo$6 billion[5]27%[5]
Georgia budgetYes$900 million[10]
Hawaii budgetNo$1.41 billion[5]25.4%[5]
Idaho budgetNo$151 million
Illinois budgetPartial$7.29 billion[5]%21.2[5]
Indiana budgetNo$569 million[5]
Iowa budgetNo$779 million[5]
Kansas budgetYes$1.11 billion[5]17%[5]
Kentucky budgetYes$1.08 billion[5]
Louisiana budgetYes$2.02 billion[5]%19.8[5]
Maine budgetNo$640 million[5]18.8%[5]
Maryland budgetPartial$1.95 billion[10]
Massachusetts budgetNo$400-600 million[10]
Michigan budgetNo$1.2 billion[5]12.3%[5]
Minnesota budgetNo$2.6 billion[5]14.7%[5]
Mississippi budgetPartialno shortfall[10]n/a[10]
Missouri budgetYes$388 million[5]%5.3[5]
Montana budget$67.1 million[5]3.6%[5]
Nebraska state budget and financesYesno shortfall[10]
Nevada budgetYes$1.24 billion[5]31.6%[5]
New Hampshire budgetNo$12.2 million[5].8%[5]
New Jersey budgetNo$8.71 billion[5]24.4%[5]
New Mexico budgetNo$440 million[10]
New York budgetPartial$2.9 - 3.5 billion[10]
North Carolina budgetNo$4.6 billion[5]%20.8[5]
North Dakota budgetno shortfall[5]n/a[5]
Ohio budgetNo$1.29 billion[5]%.48[5]
Oklahoma budgetYesno shortfall[10]n/a[10]
Oregon budgetNo$1.6 billion[5]%18[5]
Pennsylvania budgetNo$3.97 billion[5]13.5%[5]
Rhode Island budgetYes$587 million[5]19.6%[5]
South Carolina budgetYes$797 million[5]
South Dakota budgetYes
Tennessee budgetNo$1.04 billion[5]
Texas budgetYes$3.3 billion[5]7.6%[5]
Utah budgetNo$685 million[5]13.5%[5]
Vermont budgetPartial$28 million[10]
Virginia budgetPartial$1.35 billion[10]
Washington budgetYesno shortfall[10]n/a[10]
West Virginia budgetPartial$200 million[5]4.5%
Wisconsin budgetNo$3.1 billion[5]20.1%[5]
Wyoming budgetNono shortfall[5]N/A[5]

Fiscal Year 2009

Fiscal 2009 General Fund, Actual (Millions)[4]

Region/StateBeginningBalance Revenues AdjustmentsTotalResources Expenditures AdjustmentsEndingBalanceBudgetStabilization Fund
NEW ENGLAND
Connecticut$0$15,701$179$15,880$16,828$0-$948$1,382
Maine12,8552443,1003,01856260
Massachusetts2,40625,994028,40027,38401,017841
New Hampshire171,37501,3931,472-8009
Rhode Island-413,023-452,9372,9990-6280
Vermont01,103661,1681,14622060
MID-ATLANTIC
Delaware5263,14803,6743,2960379186
Maryland48712,9011,01514,40315,080-76487692
New Jersey1,30429,06056230,92630,31206140
New York2,75453,801056,55554,60701,9481,206
Pennsylvania58324,30516625,05427,0840-2,030755
GREAT LAKES
Illinois14127,5511,59329,28526,9822,023280276
Indiana1,05013,063014,11313,019130964365
Michigan4587,1611,0148,6338,45601772
Ohio1,68226,685028,36727,36207350
Wisconsin13112,11357312,81712,744-17900
PLAINS
Iowa05,889455,9345,93400519
Kansas5275,58706,1146,0640500
Minnesota1,92015,388017,30816,8610447395
Missouri8367,4514258,7128,4490263260
Nebraska5843,351-1823,7523,3290424576
North Dakota4531,35401,8071,237208362325
South Dakota01,141131,1541,15300107
SOUTHEAST
Alabama2196,7535297,5017,735-340105188
Arkansas04,43504,4354,435000
Florida32123,971024,29223,6610631274
Georgia2,21717,84225120,31018,57201,738217
Kentucky868,5536259,2639,15866407
Louisiana8669,38611910,3709,38291276854
Mississippi374,95504,9924,98408315
North Carolina59919,146019,74519,653092150
South Carolina3245,54405,8695,74801210
Tennessee3489,86967610,89310,804890557
Virginia31315,791016,10415,9430161575
West Virginia5503,902274,4793,98018481473
SOUTHWEST
Arizona16,9661,3078,2748,7540-4812
New Mexico7355,7482646,7476,046313389389
Oklahoma2916,1471316,5686,542026597
Texas6,81538,817-87044,76342,411-752,4276,726
ROCKY MOUNTAIN
Colorado2846,7438137,8407,3960444148
Idaho2402,466152,7202,72000128
Montana4341,80882,2501,85803920
Utah04,5674705,0385,016022419
Wyoming101,74501,7551,75005398
FAR WEST
Alaska05,858-4015,4575,7321,175-1,4518,898
California4,07182,772-1,75785,08690,94000
Hawaii3305,00805,3385,3750-3760
Nevada3163,67303,9893,77702120
Oregon55,849-205,8345,83400113
Washington79013,08992814,80714,617018921
TERRITORIES
Puerto Rico05,008011,25011,250000
Total$36,017$621,402-$666,202$657,908-$4,458$29,546

The following chart lists state budget information for the Fiscal Year 2009[5]. If information is in italics, it was based on April, 2009 data. Otherwise, information for a state's budget is from June and July of 2009 surveys, which is after Fiscal year 2009 ended.

State budgetSpending TransparencyShortfallPercent of General Fund Budget
Alabama budgetNo$269 million[5]13%[5]
Alaska budgetPartial$1.52 billion[5]21%[5]
Arizona budgetNo$2.43 billion[5]24.2%[5]
Arkansas budgetNono shortfall[5]n/a[5]
California budgetNo$19.64 billion[5]18.8%[5]
Colorado budgetNo$1.19 billion[5]15.1%[5]
Connecticut budgetNo$1.35 billion[5]7.9%[5]
Delaware budgetNo$236 million[5]6.8%[5]
District of Columbia budgetNo
Florida budgetNo$3.18 billion[5]12.3%[5]
Georgia budgetYes$2.93 billion[5]14.1%[5]
Hawaii budgetNo$639 million[5]11.1%[5]
Idaho budgetNo$405 million[5]14.8%[5]
Illinois budgetPartial$4.32 billion[5]13.7%[5]
Indiana budgetNo$973 million[5]7%[5]
Iowa budgetNo$35 million[5].50%[5]
Kansas budgetYes$186 million[5]2.9%[5]
Kentucky budgetYes$456 million[5]5.1%[5]
Louisiana budgetYes$341 million[5] 3.5%[5]
Maine budgetNo$270 million[5]8.7%[5]
Maryland budgetPartial$1.38 billion[5]9.5%[5]
Massachusetts budgetNo$2.59 billion[5]10.5%[5]
Michigan budgetNo$313 million[5]3.2%[5]
Minnesota budgetNo$426 million[5]1.2%[5]
Mississippi budgetPartial$407 million[5]8%[5]
Missouri budgetYes$779 million[5]10.4%[5]
Montana budgetno shortfall[5]n/a[5]
Nebraska budgetYes$5.3 million[5].20%[5]
Nevada budgetYes$1.09 billion[5]28.1%[5]
New Hampshire budgetNo$250 million[5]10%[5]
New Jersey budgetNo$4.4 billion[5]13.3%[5]
New Mexico budgetNo$454 million[5]7.5%[5]
New York budgetPartial$1.7 billion[5]3.4%[5]
North Carolina budgetNo$2.2 billion[5]10.3%[5]
North Dakota budgetno shortfall[5]n/a
Ohio budgetNo$1.18 billion[5]6.1%[5]
Oklahoma budgetYes$6.8 million[5]0.10%[5]
Oregon budgetNo$755 million[5]10.4%[5]
Pennsylvania budgetNo$2.6 billion[5] 9.2%[5]
Rhode Island budgetYes$449 million[5]13.7%[5]
South Carolina budgetYes$1.18 billion[5]17.6%[5]
South Dakota budgetYes$71.4 million[5]6.2%[5]
Tennessee budgetNo$1.07 billion[5]11.5%[5]
Texas budgetYes[5]no shortfall[5]n/a
Utah budgetNo$875 million[5]15.6%[5]
Vermont budgetPartial$75 million[5]6.5%[5]
Virginia budgetPartial$1.66 billion[5]9.8%[5]
Washington budgetYes$1.37 billion[5]8.0%[5]
West Virginia budgetPartialno shortfall[5]n/a[5]
Wisconsin budgetNo$942 million[5] 6.8%[5]
Wyoming budgetNono shortfall[5]n/a[5]


ARRA

The chart lists the amount of money states were awarded from theAmerican Recovery and Reinvestment Act and the amount received as of October 21st, 2009[15].


StateARRA Funds AwardedARRA Awarded Per CapitaARRA Funds Received
Alabama$178.58 million[15]$38[15]$14.82 million[15]
Alaska$260.03 million[15]$379[15]$25.53 million[15]
Arizona$139.39 million[15]$21[15]$29.60 million[15]
Arkansas$59.15 million[15]$21[15]$6.68 million[15]
California$1.14 billion[15]$31[15]$157.92 million[15]
Colorado$553.78 million[15]$112[15]$48.33 million[15]
Connecticut$47.24 million[15]$13[15]$1.04 million[15]
Delaware$30.29 million[15]$35[15]$4.81 million[15]\
District of Columbia$562.32 million[15]$950[15]$22.45 million[15]
Florida$334.59 million[15]$18[15]$48.00 million[15]
Georgia$209.48 million[15]$22[15]$19.20 million[15]
Hawaii$122.43 million[15]$95[15]$12.54 million[15]
Idaho$477.89 million[15]$314[15]$82.19 million[15]
Illinois$473.75 million[15]$37[15]$21.65 million[15]
Indiana$146.37 million[15]$23[15]$12.04 million[15]
Iowa$79.31 million[15]$26[15]$3.13 million[15]
Kansas$118.09 million[15]$42[15]$20.75 million[15]
Kentucky$225.46 million[15]$53[15]$22.82 million[15]
Louisiana$115.02 million[15]$26[15]$33.3 million[15]
Maine$22.62 million[15]$17[15]$16.28 million[15]
Maryland$590.51 million[15]$105[15]$48.24 million[15]
Massachusetts$335.24 million[15]$52[15]$47.62 million[15]
Michigan$315.02 million[15]$12[15]$149.57 million[15]
Minnesota$90.98 million[15]$17[15]$33.00 million[15]
Mississippi$138.94 million[15]$47[15]$10.03 million[15]
Missouri$144.14 million[15]$103[15]$11.45 million[15]
Montana$99.22 million[15]$103[15]$11.45 million[15]
Nebraska$48.44 million[15]$27[15]$1.55 million[15]
Nevada$70.84 million[15]$27[15]$15.51 million[15]
New Hampshire$16.32 million[15]$12[15]$427 thousand[15]
New Jersey$208.11 million[15]$24[15]$29.73 million[15]
New Mexico$514.91 million[15]$259[15]$263.56 million[15]
New York$750.77 million[15]$39[15]$59.97 million[15]
North Carolina$121.27 million[15]$13[15]$11.91 million[15]
North Dakota$95.45 million[15]$149[15]$16.91 million[15]
Ohio$259.27 million[15]$22[15]$23.53 million[15]
Oklahoma$79.86 million[15]$22[15]$10.21 million[15]
Oregon$105.69 million[15]$28[15]$48.57 million[15]
Pennsylvania$626.54 million[15]$50[15]$29.24 million[15]
Rhode Island$7.59 million[15]$7[15]$540,798[15]
South Carolina$253.84 million[15]$57[15]$219.56 million[15]
South Dakota$33.79 million[15]$42[15]$4.64 million[15]
Tennessee$1.11 billion[15]$179[15]$75.58 million[15]
Texas$524.02 million[15]$22[15]$47.08 million[15]
Utah$194.36 million[15]$71[15]$17.37 million[15]
Vermont$12.58 million[15]$20[15]$495 thousand[15]
Virginia$366.32 million[15]$47[15]$80.01 million[15]
Washington$2.22 billion[15]$339[15]$228.82 million[15]
West Virginia$58.19 million[15]$32[15]$4.37 million[15]
Wisconsin$46.16 million[15]$8[15]$12.29 million[15]
Wyoming$18.38 million[15]$35[15]$585 thousand[15]

See also

Footnotes

  1. ↑Watchdog, State and Local Government Spending Outpaces Private Sector, Aug 18, 2010
  2. ↑West Virginia Watchdog, GAO: State, Local Governments ‘Will Steadily Decline’, Sept. 13, 2010
  3. ↑Watchdog, GAO: State, local governments ‘will steadily decline’, Aug. 26, 2010
  4. ↑4.004.014.024.034.044.054.064.074.084.094.10"The Fiscal Survey of States" National Governors Association and National Association of State Budget Officers June 2010
  5. ↑5.0005.0015.0025.0035.0045.0055.0065.0075.0085.0095.0105.0115.0125.0135.0145.0155.0165.0175.0185.0195.0205.0215.0225.0235.0245.0255.0265.0275.0285.0295.0305.0315.0325.0335.0345.0355.0365.0375.0385.0395.0405.0415.0425.0435.0445.0455.0465.0475.0485.0495.0505.0515.0525.0535.0545.0555.0565.0575.0585.0595.0605.0615.0625.0635.0645.0655.0665.0675.0685.0695.0705.0715.0725.0735.0745.0755.0765.0775.0785.0795.0805.0815.0825.0835.0845.0855.0865.0875.0885.0895.0905.0915.0925.0935.0945.0955.0965.0975.0985.0995.1005.1015.1025.1035.1045.1055.1065.1075.1085.1095.1105.1115.1125.1135.1145.1155.1165.1175.1185.1195.1205.1215.1225.1235.1245.1255.1265.1275.1285.1295.1305.1315.1325.1335.1345.1355.1365.1375.1385.1395.1405.1415.1425.1435.1445.1455.1465.1475.1485.1495.1505.1515.1525.1535.1545.1555.1565.1575.1585.159Cite error: Invalid<ref> tag; no text was provided for refs namedNCSL July
  6. ↑Watchdog, GAO: $10 trillon gap threatens government services, Aug. 25, 2010
  7. ↑Government Accountability Office, Planned Efforts and Challenges in Evaluating Compliance with Maintenance of Effort and Similar Provisions, November 2009
  8. ↑US Bureau of Economic Analysis, Table 6.2D. Compensation of Employees by Industry, August 20, 2009
  9. ↑Government Accountability Office, STATE AND LOCAL GOVERNMENT RETIREE HEALTH BENEFITS, November 2009
  10. ↑10.0010.0110.0210.0310.0410.0510.0610.0710.0810.0910.1010.1110.1210.1310.1410.15National Conference of State Legislatures, FY 2010 Post-Enactment Budget Gaps & Budget Cuts
  11. ↑Center on Budget & Policy Priorities, “New Fiscal Year Brings No Relief From Unprecedented State Budget Problems,” September 3, 2009
  12. ↑The Arizona Republic, "Few options left for fixing Arizona budget," January 11, 2010
  13. ↑California Department of Finance, “Governor’s Message,” January 9, 2009
  14. ↑The News Journal, "Delaware lawmakers return, once again facing tough choices with budget shortfall," January 10, 2010
  15. ↑15.00015.00115.00215.00315.00415.00515.00615.00715.00815.00915.01015.01115.01215.01315.01415.01515.01615.01715.01815.01915.02015.02115.02215.02315.02415.02515.02615.02715.02815.02915.03015.03115.03215.03315.03415.03515.03615.03715.03815.03915.04015.04115.04215.04315.04415.04515.04615.04715.04815.04915.05015.05115.05215.05315.05415.05515.05615.05715.05815.05915.06015.06115.06215.06315.06415.06515.06615.06715.06815.06915.07015.07115.07215.07315.07415.07515.07615.07715.07815.07915.08015.08115.08215.08315.08415.08515.08615.08715.08815.08915.09015.09115.09215.09315.09415.09515.09615.09715.09815.09915.10015.10115.10215.10315.10415.10515.10615.10715.10815.10915.11015.11115.11215.11315.11415.11515.11615.11715.11815.11915.12015.12115.12215.12315.12415.12515.12615.12715.12815.12915.13015.13115.13215.13315.13415.13515.13615.13715.13815.13915.14015.14115.14215.14315.14415.14515.14615.14715.14815.14915.15015.15115.15215.153http://www.recovery.gov/pages/textview.aspx?data=homeMapRecipient&datasource&datasource=recipientRecovery.org, State And Agency Data Reported by Federal Contract Recipients]
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