State budget officers project continued fiscal challenges, slow growth
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Published: 02-Jun-2010

By Patrick B. McGuigan

Published: 02-Jun-2010

The National Association of State Budget Officers (NASBO, http://www.nasbo.org/) and the National Governors Association expect to release the Spring 2010 Fiscal Survey of the States tomorrow (Thursday, June 3).

While the full report is not yet available, a “Fiscal survey in Brief” posted on the NASBO website summarized a picture that combines “slower than average growth” with “continuing fiscal difficulties.”

Anticipating a review of the entire document tomorrow, the brief gave the following high (or low) points:

“As expected, fiscal 2010 presented the most difficult challenge for states’ financial management since the Great Depression. Fiscal 2011 is expected to present states with significant continuing fiscal difficulties with slower than average growth. The severe national recession drastically reduced tax revenues from every revenue source.”

The NASBO summary continues, “State general fund spending has been so negatively affected by this recession that both fiscal 2009 and fiscal 2010 saw nominal declines in state spending. This two-year decline is unprecedented and is only the second time that state general fund spending has declined in the history of the Fiscal Survey.”

Oklahoma is one of 40 states that made mid-cycle budget cuts in fiscal year 2010. The NASBO summary places the situation in some sobering context: “The decrease in revenues also resulted in 40 states making mid-year budget cuts to their fiscal 2010 budgets totaling $22 billion along with 43 states making mid-year budget cuts of $31.3 billion in fiscal 2009.”

Looking ahead, NASBO reports, “As nearly all Recovery Act funds are set to expire by the end of fiscal 2011, the loss of these funds combined with the anticipated slow recovery of state revenues is expected to result in the continuation of difficult state fiscal conditions for the next few years.”

 

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