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National Organizations Issue Report on State and Local Fiscal Facts for 2019

In February 2019, the National Governors Association (NGA), National Conference of State Legislatures (NCSL), National Association of State Retirement Administrators (NASRA), Government Finance Officers Association (GFOA) and seven other organizations representing public sector officials and employees published a report titled, State and Local Fiscal Facts: 2019.  The annual report covers the fiscal condition of states and localities, municipal bonds, and public pensions. It is intended to help correct misconceptions by providing detailed information regarding state, county and local finances; municipal bankruptcy; types and level of municipal debt and their security; and the fiscal condition of state and local government retirement systems.

Some of the stated facts include:

  • Over the last several years, state and local fiscal conditions have been stable, but improvements have been irregular.
  • In fiscal year (FY) 2018, 30 states spent less than the pre-recession peak in 2008, in real dollar terms.
  • In FY 2018, 40 states had revenues that exceeded their revenue projections; and 7 states enacted mid-year budget cuts due to a revenue shortfall.
  • Most states continue increasing their rainy day funds.  In FY 2018, 32 states reported balance increases and the median balance grew to 6.4% as a share of general fund spending, up from a low of 1.6% in FY 2010.
  • Since 2007, the average 5-year default rate for municipal bonds was 0.15% compared to 6.92% for corporate bonds. The majority were issued by not-for-profit hospitals or housing project financings, not including debt issued by Puerto Rico.
  • As of September 30, 2018, state and local retirement trusts held $4.4 trillion in assets and, on average, the 2017 funded level was 72%.
  • Since 2009, nearly every state and many local governments addressed their long-term pension concerns by making changes to pension benefit levels, financing, or both.
  • In aggregate, the share of combined state and local government spending that is dedicated to retirement system contributions is just below 5%.
  • As of FY 2015, 31 states held about $41 billion in other post-employment benefits (OPEB) assets, up from $33 billion reported in FY 2013.

The report is available here.