With data gathered from all 50 state budget offices, this semi-annual report provides a narrative analysis of the fiscal condition of the states and data summaries of state general fund revenues, expenditures, and balances. The spring edition details governors’ proposed budgets; the fall edition details enacted budgets.
Overview – Spring 2021
State general fund spending is projected to grow 5.0 percent in fiscal 2022 compared to fiscal 2021 levels, with 39 states proposing spending increases according to governors’ budgets. While the effects of COVID-19 on state budgets were not as severe as anticipated earlier in the crisis, both general fund spending and revenue levels remain below pre-pandemic projections, based on estimates at the time of data collection.
Other key highlights from the report:
- Estimated general fund spending is on track to grow 3.0 percent in fiscal 2021 but is 2 percent below pre-pandemic spending projections.
- 38 states reported fiscal 2021 general fund revenue collections are exceeding original budgeted revenue projections.
- Fiscal 2021 general fund revenue is estimated to grow 3.7 percent, or 1.4 percent after accounting for the tax deadline shift that occurred in calendar year 2020.
- Governors’ budgets are based on forecasted general fund revenue growth of 2.3 percent in fiscal 2022, or 3.4 percent after adjusting for the impact of the tax deadline shift that occurred in calendar year 2020.
- States are on track to collect 2.8 percent less over fiscal 2020 and fiscal 2021 compared to what they were expecting before the COVID-19 crisis, with 40 out of 50 states seeing declines compared to pre-pandemic projections over the two-year period.
- Rainy day fund use has been uneven across states, with the median balance holding fairly steady at 8.4 percent in fiscal 2020, 7.6 percent in fiscal 2021, and 8.3 percent in fiscal 2022.
- Medicaid spending is forecasted to continue growing in fiscal 2022 but at a slower rate of 5.2 percent, after growing an estimated 12.5 percent in fiscal 2021.