State fiscal conditions are continuing to improve into fiscal 2013, although many state budgets are not fully back to prerecession levels. This report finds that governors’ recommended budgets show an overall increase in both general fund expenditures and revenues in fiscal 2013. However, fiscal 2013 general fund revenues are projected to increase by $27.4 billion, or 4.1 percent, and additional recommended spending is only projected to increase by $14.6 billion, or 2.2 percent, suggesting that states remain cautious about the strength of the national economic recovery. Fiscal trends indicate that while aggregate state revenues will be above their pre-recession levels in fiscal 2013, total general fund spending will not yet surpass pre-recession levels. Consequently, state budgets reflect a national economy in which growth is slow and not as robust as in previous recoveries, yet overall state fiscal improvement is occurring.
States will continue to face significant challenges in fiscal 2013 with recommended general fund expenditures slowing and still $4.6 billion below the pre-recession high of $687.3 billion in fiscal 2008. In fact, 25 states are still forecasting lower general fund spending in fiscal 2013 compared to fiscal 2008. However, general fund expenditure trends are moving in a positive direction, with 39 governors recommending higher general fund spending in fiscal 2013 compared to fiscal 2012.
Report: State Revenue Returns to Pre-Recession Levels
Source: Ryan Holeywell, Governing, June 12, 2012