Source: Michael Keating, Government Product News, June 12, 2013
The Keating Report mid-year 2013 forecast on government budgets and spending (first part presented below) is in the June edition of Government Product News. The mid-year 2013 forecast is an update of our 2013 forecast that was published in the January 2013 edition of Government Product News.
The mid-year 2013 edition of the Keating Report includes forecasts on government purchases of goods and services from forecaster IHS Global Insight. Experts from a variety of organizations, including the Council of State Governments, National League of Cities and the Center on Budget and Policy Priorities offer their views on how the economy is affecting government budgets. More sections from the mid-year 2013 edition of the Keating Report, covering state budgets, local government revenue drivers, federal finances and government construction, will be posted soon.
Fragile economic recovery drives improved government budgets—Part 1
…As the economy strengthens, governments are loosening their purse strings. In 2014, government purchases of goods and services will reach $3.09 trillion, up from $3.02 trillion in 2013, according to Lexington, Mass.-based economic forecaster IHS Global Insight. For 2013, federal government purchases of goods and services will total $1.17 trillion, while state and local government purchases will reach $1.86 trillion. By 2018, government purchases of goods and services will rebound to $3.35 trillion, predicts IHS. Of that 2018 amount, state and local purchases will total about $2.13 trillion….
Cautious optimism about state finances-Part 2
State government budgets are looking up. State tax collections grew for the twelfth consecutive quarter through the end of 2012, according to the Nelson A. Rockefeller Institute of Government at the State University of New York at Albany. A majority of governors have proposed FY 2014 budgets with modest general fund spending growth, according to a recent analysis by the Washington-based National Association of State Budget Officers….State governments are pulling in unexpectedly strong income tax revenues in the latest quarter, says Standard & Poor’s Ratings Service (S&P). Those revenues are outpacing the growth of sales tax receipts during the slow economic recovery. Some states, including Alaska, Montana, New Mexico, North Dakota and Wyoming have had strong growth in revenues from severance taxes generated by mining and by oil and natural gas drilling. Total state revenues, however, are about 5 percent below pre-recession levels after adjusting for inflation, says Elizabeth McNichol, a senior fellow at the Washington-based Center on Budget and Policy Priorities….