The search for real budget numbers

By Cate Long
November 22, 2013

 

I’m not sure anyone in muniland loves numbers more than the members of The National Association of State Budget Officers (NASBO). They are the geek squad who oversees the influx of tax and other government revenues. It’s the daily state money show.

Many state revenue reporting metrics, like the Rockefeller Institute’s, only show state tax collections and do not include other funding sources like federal monies. So it’s often hard to get a complete picture of state fiscal health. NASBO has been collecting state revenue data since 1987 and reports that 2012 saw the first decline in total state revenues. In contrast Rockefeller Institute has been reporting increasing state tax revenues for 13 quarters since 1Q 2010.

NASBO (see chart above) says that fiscal 2012 was a year of transition for states as they continued to emerge from the national recession. State general fund revenues grew 3.6 percent.

This was nice steady growth for funds collected within the states. But the federal revenue piece fell off a cliff (emphasis mine):

However, federal funds to states declined 9.1 percent as spending from the American Recovery and Reinvestment Act of 2009 (ARRA), also known as the Recovery Act or stimulus, continued to wind down. The combination of state funds slowly increasing and federal funds rapidly declining led to a 1.7 percent reduction in total state expenditures, the first nominal decline in total state expenditures in the 26-year history of the State Expenditure Report.

How did this decline in total revenues shake out for individual spending categories? Public assistance and corrections spending declined in 2012-13 all other categories rose with the biggest gainer being Medicaid:

 

 

How did states cut up the spending pie? For most states Medicaid and education are the biggest spending slices:

Where did the federal money go in the state’s budgets?

The NASBO report includes excellent detail on the categories of state spending like education, transportation etc. Given federal budget pressures states will likely find support from Washington staying steady or declining.

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