State budgets continue to grow at a moderate pace after several years of a slow recovery from the recession. General fund spending is expected to grow 4.1% in fiscal-year 2016, according to the Fall 2015 Fiscal Survey of States published by the National Association of State Budget Officers.
This is the sixth consecutive year of spending and revenue growth for states. However, the 4.1% increase in spending (to $790.3 billion) is lower than 2015’s estimated 4.6% increase.
Forty-three states enacted spending increases in fiscal-year 2016 compared to 2015 levels. But this new spending is expected to be limited, with few additional budget dollars available to address competing spending demands. The most additional funding goes to boost funding for K-12 education and Medicaid, the two largest areas of state general fund expenditures.
State general fund spending for fiscal-year 2015 remains below the 2008 pre-recession peak after accounting for inflation (see chart above).
Illinois and Pennsylvania have not yet enacted operating budgets, so numbers from the spring 2015 survey were used instead. For a summary of the report, click here.