March 11, 2011

State Budget Updates

OPB published a new brief yesterday discussing expectations for the upcoming Washington State revenue and caseload/entitlement forecasts, and how both are likely to affect UW state funding levels.

**EDITED TO ADD: Note that after we released this information, the new caseload forecast was released and lowered the expected growth of caseloads for K-12, Medicaid, and Corrections. In particular, the anticipated impacts of federal healthcare reform lowered the predicted caseload for state-supported medical programs by $117 million in the long-term and $70 million in the short-term.**

Nationally, the Center on Budget and Policy Priorities (CBPP) updated their analysis of state budget shortfalls this week. They summarize the challenges faced by states via their blog:

• For fiscal year 2012, one of the most difficult budget years on record. Some 44 states are projecting shortfalls totaling $112 billion for the year, which begins July 1 in most states. (See chart below.)  This figure is somewhat lower than in our previous version of this analysis, largely because of actions that Illinois took in its last legislative session that reduced the size of its 2012 shortfall.
• The loss of emergency federal assistance. Assistance through the 2009 Recovery Act and the August 2010 jobs bill has been a huge help to states, allowing them to balance their budgets with smaller budget cuts and tax increases than they would otherwise need to make.  But that aid will largely be gone by the end of fiscal year 2011.
• A long road to recovery. Already, 26 states are projecting shortfalls totaling $75 billion for fiscal year 2013, which begins in 16 months.  This number will likely grow once all states have prepared estimates.