Industry News

On November 20, 2020, the National Association of State Budget Officers (NASBO) released its 2020 State Expenditure Report: Fiscal Years 2018-2020. This annual report examines spending in the various areas of state budgets including: elementary, secondary and higher education; public assistance; Medicaid; corrections; transportation; and other areas. It also includes data on capital spending and revenue sources in state general funds.

Some of the key findings include:

• In fiscal year 2020, total state spending (including general funds, other state funds, bonds, and federal funds) is estimated to increase 7.8%.
• Federal funds spending is estimated to increase 14.1%, which is the highest annual growth rate since the Great Recession. The significant increase is mainly due to additional federal aid states received in response to the COVID-19 pandemic, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act and increased Federal Medical Assistance Percentage (FMAP).
• Spending from the states’ own funds (general funds and other state funds combined, excluding bonds) is estimated to increase 5.1%.
• The “all other” category is estimated to have the largest gain in total state spending at 12.6%. Many of the top expenditure areas for the CARES Act funds are included in the “all other” category, such as unemployment insurance, public health programs, housing assistance, emergency management, economic relief, aid to local governments, and broadband and other technology upgrades.
• State general fund revenue is estimated to decrease 0.8%, which is the first decline since the Great Recession.

The report is available here.