States take cautious budget measures for FY 2018

December 20, 2017

States enacted cautionary budgets for 2018 with general fund spending projected to grow 2.3 percent in fiscal 2018, the lowest increase since 2010, according to the most recent NASBO survey. The National Association of State Budget Officers (NASBO) released its Fiscal Survey of the States showing caution on the part of policymakers following two years of sluggish revenue growth and spending pressures. Meanwhile, the survey finds most states are forecasting moderate improvements in their general fund revenue collections in fiscal 2018 (median growth rate of 3.2 percent) and that most states are continuing to strengthen their reserves.

The budgetary process was strained this year with a number of states calling special sessions to deal with their plans and 11 states starting the fiscal year without a fully enacted budget. New funds were directed mainly to K-12 education and Medicaid.

The survey also found that:

  • 26 states enacted general fund spending increases below 2 percent in fiscal 2018, including 15 states with spending declines;
  • General fund revenues grew 2.3 percent in fiscal 2017, with collections coming in below original budget projections in 27 states; and,
  • 22 states made net mid-year budget cuts totaling $3.5 billion in fiscal 2017.
state budgets