After several years of slow recovery to the nation’s economy, governors in most states are proposing small spending increases in Fiscal Year (FY) 2015, bolstering core services such as K–12 education and higher education, according to The Fiscal Survey of States: Spring 2014, released on June 12 by the National Association of State Budget Officers.
According to the report, governors in thirty-nine states recommended spending increases for K–12 education totaling a combined increase of $10.9 billion—the highest of any area. Medicaid ($4.9 billion) was second, followed by higher education ($3.5 billion), corrections ($1.5 billion), and transportation ($1.1 billion).
“Spending proposals have been put forth with caution and additional spending will likely be modest unless states see impressive gains in revenue,” the report reads. “As the economy continues along the trajectory of relatively slow growth, many states will continue to face difficult budgetary choices in fiscal 2015 and beyond, since revenue growth may not be sufficient to cover increased spending in many areas.”
For FY 2015, state spending is expected to increase by 2.9 percent, slower than the estimated 5 percent increase in FY 2014. Even with the increased spending levels, ten states have yet to surpass their pre-recession spending levels, the report finds. Overall, state spending in FY 2014 for all fifty states combined is still below the FY 2008 pre-recession peak after adjusting for inflation.
The complete report is available at http://www.nasbo.org/fiscal-survey-of-states-spring-2014.