NABE September 16, 2009 Scott Pattison Executive Director National Association of State Budget...
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NABE September 16, 2009 Scott Pattison Executive Director National Association of State Budget Officers 444 North Capitol Street, NW, Suite 642 • Washington, DC 20001 • (202) 624-5382 • www.nasbo.org
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Transcript of NABE September 16, 2009 Scott Pattison Executive Director National Association of State Budget...
NABE
September 16, 2009
Scott PattisonExecutive Director
National Association of State Budget Officers
444 North Capitol Street, NW, Suite 642 • Washington, DC 20001 • (202) 624-5382 • www.nasbo.org
NASBO 2
Recent State Fiscal Situation
Extremely difficult fiscal period for states
States experiencing significant shortfalls $230B+ for fiscal years 2009-2011 Large revenue declines
Widespread budget cuts, layoffs/furloughs
ARRA helping, but does not solve all fiscal problems
NASBO 3
Regions
Nearly every state seeing decreasing revenue Large states (New York, California) in bad
shape Housing bust states (Arizona, Florida,
Nevada) in very bad shape Auto sector, manufacturing states hurting Small mountain and middle west states in
relatively better shape but still seeing difficult fiscal situation and declining revenue
NASBO 4
This downturn vs. Post ‘01
Last Time: Housing sector strong in ’01 Primarily income tax decline
This Time: Broad economic decline; Longer recession Localities will be hit this downturn
NASBO 5
Negative Spending in Both FY 2009 and FY 2010
*32-year historical average rate of growth is 5.9 percent **Fiscal 09 numbers are estimated
***Fiscal 10 numbers are recommended Source: NASBO June 2009Fiscal Survey of States
*
NASBO
State Revenue Down 12% in 1st Quarter: Largest Decline on Record
-40
-20
0
20
40
60
80
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
Year-Over-Year Real Change inQuarterly State Tax Revenue
Total PIT CIT Sales
Source: Fiscal Studies Program, Rockefeller Institute of Government; U.S. Census Bureau
NASBO
Revenue Forecasts
7
* Fiscal 2008 numbers are actual Sources: Hawaii Council on Revenues; VT JFO & Administration Forecast
$1.10 $1.15 $1.20 $1.25 $1.30 $1.35 $1.40 $1.45
Fiscal 2008*
Fiscal 2009
Fiscal 2010
Fiscal 2011
Vermont Projected Revenue (in billions)
$4.20
$4.30
$4.40
$4.50
$4.60
$4.70
Fiscal 2008*
Fiscal 2009
Fiscal 2010
Fiscal 2011
Hawaii Projected Revenue (in billions)
NASBO 8
Balances Declining
0
10
20
30
40
50
60
70
80
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Total Year-End Balances and Total Year-End Balances as a % of Expenditures, Fiscal 1979-Fiscal 2010 (Recommended)
Total Balances as a Percentage of Expenditures Total Balance
*32-year historical average is 5.8% Source: NASBO June 2009 Fiscal Survey of States
NASBO
Budget Cuts at Record Levels
9
Source: June 2009 Fiscal Survey of States
NASBO
Combined Budget Gapsof $230B
10
*Only 24 states have forecasted FY 2011 budget gaps to date
37 states
24 states
NASBO 11
The Cliff: Year-by-Year State Stimulus Spending
Source: Stateline.org
NASBO 12
Long Term Spending Pressures
Medicaid and Health Care
K-12 and Higher Education
Demographic Changes
Corrections Infrastructure Pensions
NASBO 13
State Fiscal Outlook
Much will depend on the length and severity of the recession
Recovery for states at best in FY 2011; Revenues may not recover until FY 2012
States will look for creative financing and revenue opportunities to meet these spending demands
Opportunities for reform, restructuring, examining priorities
