Industry News

On December 19, 2023, the National Association of State Budget Officers (NASBO) released its semi-annual report, Fall 2023 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 2024. The survey shows state general fund spending in fiscal 2024 is projected to total over $1.26 trillion, an increase of 6.5% over fiscal 2023 levels. In fiscal 2023, general fund spending totaled $1.19 trillion, an increase of 11.8%. This increase followed an increase of 16.0% in fiscal 2022, which was the highest annual growth rate recorded in the Fall Fiscal Survey in 40 years. Adjusted for inflation, general fund spending increased 8.0% in fiscal 2022 and 7.0% in fiscal 2023. The 2023 increase was due to several factors including: 1) higher inflation; 2) one-time spending on investments from surplus funds; 3) increased spending from general funds since federal funds were expiring in certain areas; and 4) lower baseline due to spending reductions for some states in fiscal 2021.

In fiscal 2023, general fund revenues totaled over $1.2 trillion, an increase of 0.9% over fiscal 2022 levels. In 2024 enacted budget forecasts, general fund revenue is projected to decline 1.8%. In fiscal 2023, the slower revenue growth than expected was mainly due to: 1) the impact of recently enacted tax cuts; 2) weaker stock market performance in 2022; 3) slower growth in consumption; 4) changing spending patterns; and 5) lower inflation.

In fiscal 2023, 41 states reported year-over-year increases in their rainy day funds (also referred to as budget stabilization funds). As a percentage of general fund spending, the median rainy day fund balance increased from 10.8% in fiscal 2022 to 12.3% in fiscal 2023. Based on states’ enacted budgets, it is also projected to increase to 13.8% in fiscal 2024.  

The full report and summary are available here.