![Page 1: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/1.jpg)
Challenges & Opportunities in State & Local Budgeting
Presented ByKenneth Hunter, MPA, City of Rocky Mount, NC
Scott Pattison, Executive Director, NASBODecember 9, 2014
![Page 2: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/2.jpg)
Overview
How We Budget
State Trends
Local Trends
Q&A
![Page 3: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/3.jpg)
Different Governments,Different Budgeting Processes
![Page 4: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/4.jpg)
Structural Challenges
Where’s Washington?
Capacities/Expectations/Polarization
Entitlements
Obligations
![Page 5: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/5.jpg)
When Budgeting Matters
Cover Obligations First
Prioritize Needs & Objectives
Realistic Projections
Assess Long‐Term Impact
![Page 6: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/6.jpg)
Scott PattisonExecutive DirectorNational Association of State Budget Officers
444 North Capitol Street, NW, Suite 642 • Washington, DC 20001 • (202) 624-5382 • www.nasbo.org
ASPADecember 9, 2014
![Page 7: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/7.jpg)
State Fiscal Overview
Budgets show continued slow improvement and stability
Fiscal 2015 marks the fifth consecutive year of revenue and spending increases
Positive signs: shrinking budget gaps, minimal mid-year budget cuts, net tax cuts and stable rainy day fund balances
Concerns: below average budget growth, limited projected revenue gains, cost increases, unmet demand in areas such as infrastructure
![Page 8: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/8.jpg)
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
(Perc
entag
e Cha
nge)
Annual Percentage Change in General Fund Expenditures
*Average
37-year historical average annual rate of growth is 5.5 percent.
![Page 9: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/9.jpg)
Additional budget dollars target K-12 Education and Medicaid
![Page 10: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/10.jpg)
GF Spending Still Below Pre-Recession Peak Adjusted for Inflation
Source: NASBO Fall 2014 Fiscal Survey of States; Fiscal 2015 numbers are enacted*Aggregate spending levels would need to be at $771 billion to remain equivalent with real 2008 spending levels.
12/19/2014www.nasbo.org 5
![Page 11: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/11.jpg)
GF Revenue Also Below Pre-Recession Peak Adjusted for Inflation
Source: NASBO Fall 2014 Fiscal Survey of States; Fiscal 2015 numbers are enacted*Aggregate revenue levels would need to be $763 billon to remain equivalent with real 2008 revenue levels.
12/19/2014www.nasbo.org 6
![Page 12: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/12.jpg)
States Enact $2.3B in Net Tax and Fee Cuts for FY15
Fiscal Year
12/19/2014www.nasbo.org 7
![Page 13: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/13.jpg)
![Page 14: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/14.jpg)
Budget Cuts Made After the Budget Passed ($ millions)
Source: NASBO Fall 2014 Fiscal Survey *Fiscal 2015 midyear cuts are ongoing
Minimal Midyear Budget Cuts So Far in Fiscal 2015
12/19/2014www.nasbo.org 9
![Page 15: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/15.jpg)
Spending by Funding Source(Percentage)
Source: NASBO State Expenditure Report
12/19/2014www.nasbo.org 10
![Page 16: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/16.jpg)
Shifting of Funding Sources
Total State Expenditures by Funding Source (2008)
Total State Expenditures by Funding Source (2014)
Source: NASBO State Expenditure Report
12/19/2014www.nasbo.org 11
![Page 17: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/17.jpg)
Total State Expenditures by Function, Estimated Fiscal 2014
Source: NASBO State Expenditure Report
12/19/2014www.nasbo.org 12
![Page 18: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/18.jpg)
General Fund Expenditures by Function, Estimated Fiscal 2014
Source: NASBO State Expenditure Report
12/19/2014www.nasbo.org 13
![Page 19: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/19.jpg)
Revenue Sources in the General Fund (Percentage)
Source: NASBO State Expenditure Report
14 12/19/2014www.nasbo.org
![Page 20: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/20.jpg)
State Fiscal Outlook
15
Trends are positive with 43 states increasing general fund spending in fiscal 2015
Revenue collections are projected to grow at a faster rate compared to fiscal 2014.
However, additional revenue is limited and spending demands continue to rise, particularly in critical areas of the budget like health care and higher education
Fiscal stability likely to continue, but unmet spending needs may persist along with slow budget growth
![Page 22: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/22.jpg)
Where Are Local Governments Headed?
Overview of 2014 Fiscal Condition of Cities
![Page 23: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/23.jpg)
Highlights
Improving (current resources & reserves)
Revenues growing, not recovered
Emphasis on wages, public safety, infrastructure
![Page 24: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/24.jpg)
Highlights
Fee increases over tax increases
Challenged by benefits, infrastructure needs
Revenues could stagnate, expenditures continue growing
![Page 25: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/25.jpg)
![Page 26: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/26.jpg)
![Page 27: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/27.jpg)
![Page 28: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/28.jpg)
![Page 29: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/29.jpg)
![Page 30: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/30.jpg)
2014 City Fiscal Condition AnalysisAvailable at
http://bit.ly/12mOQus
![Page 31: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/31.jpg)
Business Trends
Housing volatility remains amongst positive signs (prices, starts, SFH v. MFH)
Manufacturing up 18 straight months
Services growing 58 straight months
![Page 32: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/32.jpg)
Business Trends
Employment growth remains tied to skilled position, knowledge centers (progressive cities)
Small business sentiment improved significantly following negative trend all year (Hmmm…what changed?)
![Page 33: ASPA Webinar: Challenges and Opportunities in State & Local Budgeting](https://reader035.vdocuments.net/reader035/viewer/2022062710/55a1ccb11a28ab1f678b477b/html5/thumbnails/33.jpg)