State Budgets See Meager Growth, More Fiscal Uncertainty in 2014
State budgets are expected to undergo only modest improvements and continued financial challenges in FY 2014, according to a report from the National Association of State Budget Officers (NASBO). Revenue is projected to increase by only 0.8 percent in FY 2014 as a result of federal tax rate increases in 2013 and tax cuts in states in 2014. “The lingering effects of the recession are still present, as a number of states have yet to surpass pre-recession revenue and spending levels in nominal terms,” the report authors find. A meager spending increase will represent an improvement from the 26-year low reached in 2012, but “for most states, spending growth will be very limited and there will be few additional budget dollars available.”