Many states recently recorded notable revenue gains, but a new report suggests the strong growth will be short-lived.
The National Conference of State Legislatures provides a detailed look at states’ fiscal outlook in a report released this week, finding most year-end balances will likely fall in fiscal year 2014. General fund revenues are projected to increase by only 1.3 percent, compared to the 5.5 percent aggregate growth states experienced in fiscal year 2013.
Sixteen states (shown below) expect drops in general fund revenue in fiscal year 2014. Alaska officials project revenues to fall more than any other state – by 15.8 percent -- mostly as a result of tax reform pertaining to oil and natural gas production. Legislative fiscal offices in Ohio (-7.2 percent) and Kansas (-6.2 percent) also anticipate notable revenue declines.
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In all, 33 states and the District of Columbia project revenue growth trailing fiscal 2013 levels.
The following table shows projected change in states' fiscal 2014 general fund revenue, compiled in NCSL’s survey of state legislative fiscal offices. Projected expenditure data wasn’t immediately available.
|State||FY 2014 Revenue Change (%)|
|District of Columbia||7.1|
Spending, meanwhile, is projected to rise in 40 states and D.C. in fiscal 2014. Medicaid and higher education expenses will help drive up total aggregate general fund appropriations 3.9 percent, according to the survey.
The NCSL report also summarizes states’ fiscal 2014 spending priorities.
K-12 education spending, which accounts for about a third of general fund appropriations, will rise about 2.5 percent. All but five states reported increases in state K-12 education funding. Total higher education spending is projected to swell 5.1 percent.
Similarly, general fund Medicaid spending will rise 5.9 percent, with 37 states reporting projected fiscal 2014 increases.