Budget surpluses also allowed many states to set aside funds-either rainy-day or stabilization funds-to temper any unexpected economic downturn.
Forty states reported revenue ahead of projections in 2018, as compared to only 18 states in 2017. Improved credit conditions allowed states to appropriate increased funds toward education (elementary and higher education) and Medicaid services.Īfter modest increases in 20, general fund revenue increased 6.2% in fiscal 2018, according to the National Association of State Budget Directors, propelled by a sharp increase in personal income tax collections. Compared to last year, states’ financial conditions for fiscal 2019 are showing marked improvement, somewhat easing the pressure on their ability to meet constituents’ demands for expanded social services.
From the standpoint of municipalities, the slow but steady nature of economic growth has allowed many municipalities to financially set their houses in order.Īfter nine years of slow but steady economic expansion, total revenue in most states has recovered from pre-recession lows. We believe that the subpar nature of this recovery has prolonged the cycle, as the tempered growth rate has kept the economy from forming a boom-bust scenario. Historically, growth during economic rebounds has ranged between 1.5% and 6.9% with an average rate of growth of 4.1%.
Since the end of the “great recession” in the second quarter of 2009, the domestic economy has expanded at an annualized rate of 2.3%. economy will officially be labeled as having had the longest period of expansion in the post-World War II era, according to the National Bureau of Economic Research.
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