Industry News

On December 17, 2021, the National Association of State Budget Officers (NASBO) released its semi-annual report, Fall 2021 Fiscal Survey of States. The report updates information on the states’ fiscal conditions, including aggregate and individual state data on general fund receipts, expenditures, and balances. The survey was conducted by NASBO and completed by state budget officers in all 50 states.

The report highlights states’ enacted budgets for fiscal 2022. The survey shows state general fund spending in fiscal 2022 is projected to total over $1.0 trillion, increasing 9.3% over fiscal 2021 levels. The increase is due to several factors including: 1) one-time spending from surplus funds; 2) shift in reliance on federal funds to general funds for some programs; 3) lower baseline due to spending reductions for some states in fiscal 2021; 4) state funding for pandemic response efforts; and 5) inclusion of COVID-related federal aid. Also, compared to governors’ budgets proposed before the pandemic, states’ enacted budgets indicate a 4.3% growth in general funding spending in fiscal 2021 totaling $931.7 billion.

In fiscal 2021, general fund revenues totaled over $1.0 trillion, increasing 14.5% over fiscal 2020 levels. Revenues performed better than expected due to: 1) the impact of the tax deadline shift when revenues in some states were recognized; 2) low baseline in fiscal 2020 due to the impact of the pandemic on state revenues; and 3) inclusion of federal funds.

Before the pandemic, rainy day funds and total balances were at record highs. These amounts have been declining since some states have had to use their reserves to address budget shortfalls. However, rainy day funds reached a new record high of about $113 billion in fiscal 2021 due to stronger than anticipated revenue growth.

The full report and summary are available here.