States' Fiscal Outlook Brightens, But Some Programs Face Cuts
State budgets are bouncing back from the recession, but many governors and legislatures are keeping a tight rein on spending for the coming fiscal year, and some are calling for cuts in programs such as transportation.
The latest Fiscal Survey of States, which the National Governors Association (NGA) and National Association of State Budget Officers (NASBO) released on June 2, shows that 14 states are recommending a total of $212.8 million in general-fund cuts in transportation programs for fiscal year 2012. Most states' fiscal years begin on July 1.
In addition, six states implemented mid-year fiscal 2011 transportation reductions, totaling $357.2. California accounted for $262.4 million of that total. Texas had the second-largest cut, at $84.4 million.
General-fund transportation spending funds highway maintenance and other activities.
The fiscal snapshot, which NGA and NASBO issue twice a year, doesn’t discuss states’ capital budgets, which would finance major new public-works projects, but capital spending on infrastructure is likely to be under pressure, says Scott Pattison, NASBO executive director.
“There are a lot of infrastructure issues, going forward. And when money’s tight, money’s tight," he says.
Dan Crippen, NGA’s executive director, adds, “There are some significant infrastructure programs needing to be reauthorized in Congress,” including aviation and surface transportation. New multi-year bills for those key programs have been delayed for many months. Crippen says the legislative situation create uncertainty in the states over funding for those programs.
The survey also says that states’ total general-fund spending is expected to climb 2.6% in fiscal 2012, to $668.6 billion. That follows a 5.9% gain in 2011. But the projected 2012 level is still below 2008’s $687.3 billion.
Although states’ tax revenue continues to go up, the need to boost spending in certain areas, particularly Medicaid, is making it hard for officials to avoid cuts elsewhere.
“They still have to make tough tradeoffs,” says Pattison.
