NCSL: States Haven't Won FY03 Budget Battle

With only two months left in most fiscal years, states must still close a $21.5 billion budget gap in order to comply with their balanced budget requirements, according to a report issued today by the National Conference of State Legislatures.

Entering their third straight year of budget shortfalls, state lawmakers have had to close a cumulative $200 billion budget gap. NCSL President and Oklahoma Senator Angela Monson says state policymakers are dealing with complicating factors on both sides of the budget.

"Already plagued by anemic revenue performance, lawmakers have been besieged by spending overruns - from Medicaid to homeland security to emergency snow removal," she said. "The problems have been relentless as most states have run out of the simple, painless options."

During FY 2003, which began on July 1 for most states, 37 states saw revenues failing to meet projections, while only three reported revenues exceeding budget levels. Forty-five states subsequently revised their forecasts, in nearly every instance downward.

The situation is not much brighter for FY 2004. As states craft their budgets for the next fiscal year, estimates show 41 states facing a cumulative budget gap of $78.4 billion. Thirty-seven of those states reported a gap in excess of 5 percent of their general fund, while 19 of these exceed 10 percent.

Copies of State Budget Update: April 2003 are available for purchase by contacting NCSL's publications department at 303-364-7700 or by e-mail at books@ncsl.org.