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NASBO Releases Spring 2023 Fiscal Survey of States

On June 22, 2023, the National Association of State Budget Officers (NASBO) released their semi-annual report, The Fiscal Survey of States: Spring 2023. The report updates information on the states’ fiscal conditions and presents aggregate and individual data on the states’ general fund receipts, expenditures and balances. The survey was conducted by NASBO and completed by the governors’ state budget officers in all 50 states.  

The report highlights governors’ budget proposals for fiscal 2024 and provides updated estimates for general fund spending, revenue and balances for fiscal 2023 as well as actual data for fiscal 2022. According to NASBO, in fiscal 2024, state budget growth is expected to slow following two consecutive years of significant increases, partially driven by one-time expenditures using surplus funds.

For fiscal 2024, the recommended budgets are estimated to modestly increase by 2.5% for general fund spending. In fiscal 2023, states estimated total general fund spending of $1.20 trillion was on course for annual growth in the aggregate of 12.6% following a record annual increase of 16.8% in fiscal 2022. Adjusted for inflation, general fund spending increased 8.1% in fiscal 2022 and is estimated to increase 4.4% in fiscal 2023.

Other key findings include:

  • For fiscal 2023 general fund revenue collections, 45 states reported exceeding original budgeted revenue projections; at the time of data collection, current estimates were up by 6.5%.
  • Growth in state tax revenue collections has slowed after two consecutive years of double-digit growth with revenues expected to decline by 0.3% in fiscal 2023 and 0.7% in fiscal 2024; this revenue slowdown reflects the impact of recently enacted or proposed tax cuts, slower economic growth, and weaker stock market performance and capital gains.
  • As a share of general fund spending, the median rainy day fund balance is expected to increase from 11.5% in fiscal 2022 to 12.0% in fiscal 2023 and 13.5% in recommended budgets for fiscal 2024. 
  • Total balances that include rainy day funds and general fund ending balances represented 37.3% as a share of total general fund expenditures at the end of fiscal 2022; as states draw down general fund balances, total balances are projected to be 22.8% of general fund expenditures by the end of 2024.

The full report and summary are available here.