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STATE BUDGET UPDATESTATE BUDGET UPDATEPresentation at thePresentation at thePresentation at the Presentation at the
Fiscal Leaders Seminar & Fall ForumFiscal Leaders Seminar & Fall ForumWashington, D.C. Washington, D.C.
Arturo PérezNational Conference of State Legislatures
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OVERVIEWOVERVIEW
Better state fiscal conditions
Company
Better state fiscal conditionsFew budget gapsRevenues continue to improveCompany
LOGORevenues continue to improveYear-end balances are rising
Performance is uneven & statePerformance is uneven & state budgets remain vulnerable
F d l d fi it d ti tiFederal deficit reduction actionsSpending pressuresSl i h iSluggish economic recovery
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FY 2013 TAX COLLECTIONS( C O M P A R E D W I T H T H E L A T E S T E S T I M A T E )
Company2Personal Income
2Sales & Use
2Corporate Income
Company
LOGO 13
15138 2
14
1515
5218116 2
1513 15 14
Above Estimate Below Estimate On Target
Tax Not Levied Not Available (NE & NM)
g
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OTHER TAXESOTHER TAXES
Severance
Company
28 Real Estate TransferCompany
LOGO89
Real Estate Transfer
28
Miscellaneous 89
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AK
2012 STATE TAX CHANGES
Company
WA ME
MT ND
MNCompany
LOGOIL NH
WI
PA
OR
OH
NY
WY
NEIA
MI
IN
WV
VT
SD
MN
NV
ID
CA
CT
NJAR
KY
MA
AZ
NC
WV
SC
RIHICO
UT
NM
KS
OK
MO
TN
VA
AL GAMS
FL
DC
DE
MDTX
LA
Increase of 1% or more n = 3PR
Increase of 1% or more, n 3
Decrease of 1% or more, n = 3
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2012 BALLOT MEASURES: TAXES
Company
AR - Temporary sales tax increase of 0.5% for state highways
CA 2Company
LOGOCA - 2 measures-
Prop 30 temporarily increases sales tax & income tax on incomes over $250K; money to K-12 and community colleges Prop 39 Requires multistate businesses to pay income taxes based on percentage of their sales in California. Dedicates revenues for five years to clean/efficient energy projects.
OR - corporate tax refunds redirected to K-12
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REVENUE OUTLOOK FORTHE REMAINDER OF THE FISCAL YEAR
34
Company30
35
nsCompany
LOGO20
25
risdi
ctio
10
15
20
6 7ber o
f Jur
5
10 64
Num
b
0Optimistic Stable Concerned Pessimistic
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REVENUE OUTLOOK FORTHE REMAINDER OFTHE FISCAL YEAR
CompanyCompany
LOGONH
VT
CT
NJ
MA
RI
DC
DE
MD
Optimistic 6Stable 34Concerned 7Pessimistic 4
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SPENDING OVERRUNS IN FY 2013
Company
Medicaid or other health care programs10 states compared with 6 at this time last year and
Company
LOGO20 two years ago
Education (K-12 & Higher Ed)5 states
Corrections ID, MD, MS, VT
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SUMMARY OFCURRENT STATE FISCAL SITUATION
CompanyCompany
LOGO
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RECOVERY( R E C E S S I O N A R Y I M P A C T O N G E N E R A L F U N D R E V E N U E C O L L E C T I O N S )
$350Recession of 1991
Company$250
$300
$350
Company
LOGO$150
$200
$250
of D
olla
rs
$50
$100
Billi
ons
o
$0
Fiscal Year
Recession Length: 8 months
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RECOVERY( R E C E S S I O N A R Y I M P A C T O N G E N E R A L F U N D R E V E N U E C O L L E C T I O N S )
$560Recession of 2001‐02
Company$520
$540
$560
Company
LOGO$480
$500
of D
olla
rs
$420
$440
$460
Billi
ons
$420
Fiscal Year
Recession Length: 8 months
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WEAKOVERY( R E C E S S I O N A R Y I M P A C T O N G E N E R A L F U N D R E V E N U E C O L L E C T I O N S )
$670The Great Recession
Company$640
$650
$660
$670
rsCompany
LOGO$610
$620
$630
$640
ons
of D
olla
r
$580
$590
$600
$
Billi
o
$570
Fiscal YearRecession Length: 18 months
Fiscal Year
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RECOVERY GROWTH RATEOF GENERAL FUND REVENUES INOF GENERAL FUND REVENUES IN
COMPARISON TO PREVIOUSRECOVERIES
Company
RECOVERIES
Company
LOGONH
VT
CT
NJ
MA
RI
Below 27In Line 10Ab 4
DC
DE
MD
Above 4Not Applicable 9
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RETURN OR PROJECTED RETURNRETURN OR PROJECTED RETURNTO PEAK REVENUE COLLECTIONS
Company12
14 13
Company
LOGO
6
8
10
6 6 6
2
4
6 4
1 0 10
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
FY 2018
0
Unknown: 11 statesNot Applicable: AK, DC and ND
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RETURN OR PROJECTED RETURNRETURN OR PROJECTED RETURNTO PEAK REVENUE COLLECTIONS
CompanyCompany
LOGONH
VT
CT
NJ
MA
RI
FY 2018 / FY 2019 1
FY 2011 / FY 2012 19
FY 2013 6
DC
DE
MD
FY 2018 / FY 2019 1
Unknown 11
Not Applicable 3
0 3 6
FY 2014 / FY 2015 10
FY 2016 / FY 2017 1
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STATE YEAR-END BALANCESF Y 2 0 0 7 T O F Y 2 0 1 3 ( P R O J E C T E D )
Company12.0%
12%
14%
ture
s
All JurisdictionsCompany
LOGO8.0%
8%
10%
12%
GF
Expe
ndit
4.8%
4%
6%
EB a
s a
% o
f
0%
2%
2006 2007 2008 2009 2010 2011 2012 2013
YE
Fiscal Year
Source: NCSL survey of state legislative fiscal offices, various years.
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STATE YEAR-END BALANCESF Y 2 0 0 7 T O F Y 2 0 1 3 ( P R O J E C T E D )
Company
F Y 2 0 0 7 T O F Y 2 0 1 3 ( P R O J E C T E D )
11 0%10%
12%
ture
s
Without: AK and TXCompany
LOGO11.0%
8%
10%
GF
Expe
ndit
4.4%4%
6%
EB a
s a
% o
f
1.8%0%
2%
2006 2007 2008 2009 2010 2011 2012 2013
YE
Fiscal Year
Source: NCSL survey of state legislative fiscal offices, various years.
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STATE YEAR END BA ANCESSTATE YEAR-END BALANCESF Y 2 0 0 7 T O F Y 2 0 1 3 ( P R O J E C T E D )
Company 11 4%10%
12%
ture
s
Without: AK, CA, IL and TXCompany
LOGO11.4%
8%
10%
GF
Expe
ndit
4.1%5.1%4%
6%
EB a
s a
% o
f
0%
2%
2006 2007 2008 2009 2010 2011 2012 2013
YE
Fiscal Year
Source: NCSL survey of state legislative fiscal offices, various years.
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STATE YEAR-END BALANCESF Y 2 0 0 7 T O F Y 2 0 1 3 ( P R O J E C T E D )
Company
F Y 2 0 0 7 T O F Y 2 0 1 3 ( P R O J E C T E D )
12.0%
11.4%12%
14%
ture
s
Company
LOGO 8.0%
11.0%
8%
10%
GF
Expe
ndit
4.8%
4.4%4.1%
5.1%
4%
6%
EB a
s a
% o
f
1.8%0%
2%
2006 2007 2008 2009 2010 2011 2012 2013
YE
Fiscal Year
Source: NCSL survey of state legislative fiscal offices, various years.
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C S B GCUMULATIVE STATE BUDGET GAPS: FY 2002-FY 2014
Company $28.2$160
$180
$200
s
Amount Before Budget Adoption Amount After Budget Adoption Projected
Company
LOGO
$100
$120
$140
of D
olla
rs
$145.9
$ $91 0
$29.9
$5.3 $77.0$12.3 $6.8
$60
$80
$100
Bill
ions
o
$49.1$78.4
$36.3 $26.9$40.3
$83.9 $91.0
$37.2
$0.7
$12.8$32.2
$12.2$0
$20
$40
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
B
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: NCSL survey of state legislative fiscal offices, various years.
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TOP FY 2013 CHALLENGES
CompanyCompany
LOGO
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CONCLUSION
CompanyCompany
LOGOImproving revenuesYEBs are risingBudget gaps are rare
Performance is unevenMedicaidFederal actions
Spending is stableIncreased flexibility
UnemploymentLackluster revenue growth
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FOR MORE INFORMATION
Company
NCSL Homepage: www.ncsl.org
Budget & Tax: www ncsl org/fiscalCompany
LOGOBudget & Tax: www.ncsl.org/fiscal
State Budget Update: Summer 2012 (available online)
State Budget Update: Fall 2012 (available December 2012)
Weakcovery (available December 2012)
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Additional Questions?Additional Questions?
Arturo Arturo PérezPérezarturo perez@ncsl [email protected] 303-856-1493