State Budget Fall 2012 Update

7/30/2019 State Budget Fall 2012 Update

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STATE

BUDGETUPDATE:FALL

2012

Fiscal Affairs ProgramNational Conference of State Legislatures

William T. Pound, Executive Director

7700 East First PlaceDenver, CO 80230(303) 364-7700

444 North Capitol Street, N.W., Suite 515Washington, D.C. 20001(202) 624-5400

www.ncsl.org


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The National Conference of State Legislatures is the bipartisan organization that serves the legislators and

staffs of the states, commonwealths and territories.

NCSL provides research, technical assistance and opportunities for policymakers to exchange ideas on the

most pressing state issues and is an effective and respected advocate for the interests of the states in the

American federal system.

NCSL has three objectives:

To improve the quality and effectiveness of state legislatures. To promote policy innovation and communication among state legislatures. To ensure state legislatures a strong, cohesive voice in the federal system.The Conference operates from offices in Denver, Colorado, and Washington, D.C.

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2012 by the National Conference of State Legislatures. All rights reserved.Item #121812PDF

Price: $49.00

This document may not be reprinted without permission.


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Contents

FY 2013 Revenue Performance ...................................................................................................................... 2

Revenue Outlook for the Remainder of FY 2013 ........................................................................................... 4

Areas of Spending Over Budget ...................................................................................................................... 4

Summary of the State Fiscal Situation ............................................................................................................ 5

Projected Return to Peak Revenue Collections ............................................................................................... 6

State General Fund Revenue Recovery: A Historical Comparison. ................................................................. 7

TABLES & FIGURES

Figure 1. Peronal Income Tax Performance.....2

Figure 2. General Sales Tax Performance.....2

Figure 3. Corporate Income Tax Performance.......3

Figure 4. Revenue Outlook for the Remainder of FY 2013....4Figure 5. Return to Peak Revenue Collections....6Figure 6. General Fund Revenue Recovery Growth Rates...8

Table 1. Performance of Major Tax Categories in FY 2013: Personal Income Tax ......................................... 9Table 2. Performance of Major Tax Categories in FY 2012: General Sales & Use ........................................ 13

Table 3. Performance of Major Tax Categories in FY 2012: Corporate Income ............................................ 17

Table 4. Performance of Major Tax Categories in FY 2012: Severance ......................................................... 21

Table 5. Performance of Major Tax Categories in FY 2012: Real Estate Transfer ......................................... 24

Table 6. Performance of Major Tax Categories in FY 2012: Other ............................................................... 27

Table 7. Revenue Outlook for the Remainder of FY 2012 ............................................................................ 31

Table 8. Areas of Spending Significantly Over Budget in FY 2013 ............................................................... 34

Table 9. Summary of State Fiscal Situations ................................................................................................. 37

Table 10. Return or Projected Return to Peak Revenue Collections ............................................................. 41


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STATE BUDGET UPDATE:FALL 2012

State budgets continue their slow to moderate rate of recovery. A fall 2012 survey of state

legislative fiscal officers found solid revenue performance in most states, although a few

reported underperformance in individual tax categories. Generally, it appears that state

budgets are in line with budgeted estimates through the first few months of fiscal year (FY)

2013. The slowly improving economic

situation across the states has led most

officials to describe their current fiscal

situation as stable.

Despite these positive fiscal trends, federal

deficit reduction actions, increasing

program pressures, international debt crises,

and the impact from recent storms will

continue to challenge lawmakers as they

begin their new legislative sessions.

While there are signs of improvement, the

turnaround has been uneven across the

nation. Although half of the states expect to

return to peak revenue levels by the close of

this fiscal year, several others are still

awaiting a return to peak levels. Some states

are uncertain when that will occur.

Three and a half years following the official

end of the recession, state officials face the prospect that slow and steady growth may be the

new normal. With the unpredictability of recent fiscal years, stable is not necessarily a bad

position for states but enough uncertainty lingers on the horizon to create a fragile situation

for state budgets.

This report is based on data collectedin the fall of 2012 from legislativefiscal officers in all 50 states and theDistrict of Columbia and includesinformation on:

State revenue performance; Revenue outlook for the

remainder of the fiscal year;

Areas of spending over budget; A summary of state fiscal

situations;

Return to peak revenuecollections; and

A historical comparison of therecovery of state general fundrevenues.


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2| S T

FY 201Revenue

More stat

income, s

exceed ge

tax catego

The rest o

income, s

included

Personal

Personal i

Nine state

Tpe

t

t

Ft

F

TTable 1 c

General S

General s

source rev

Hampshir

Ts2

I

1Revenue p

2Alaska, FlNew HamTennessee

T E B U

Revenueerformance r

s reported st

les and corp

eral fund rev

ries are perfor

f this section

les and corp

or those state

ncome Taxe

ncome tax col

s do not levy

welve states a

ersonal incotimate (see fi

eir forecasts.

e target and

awaii reporte

ifteen states s

ough Delaw

regon and R

alifornia red

2013.

hirteen states

ansas were fai

ntains more i

ales Taxes

les and use ta

enues. Five st

e and Orego

hirteen states

les tax collect. In 11 of th

wa and the

erformance data

rida, Nevada, Sshire and Tenn

did provide info

G E T U

Performaemained solid

ength rather

rate income.

enue targets.

ming below f

provides a sn

rate income t

that provide

lections acco

a broad-base

nd the Distri

e tax collectiure 1). Ten

Iowa and the

till saw collec

d collections

w collections

re, Maryland

ode Island h

ced its estima

saw personal

ling to meet

nformation o

xes represent

atesAlaska,

do not lev

and the Distr

ions exceed tse states, the

istrict of Col

is not available f

uth Dakota, Tessee do not levy

rmation on the p

D A T E :

cefor most stat

han weaknes

he majority

nly Idaho,

orecast.

pshot of rece

axes. Informa

d it.1

nt for nearly

personal inc

t of Columbi

ns exceededf these states

District of C

tions surpass

bove a lower

come in on t

, Mississippi,

d raised their

te since the b

income tax c

rojections th

n personal in

about 31 per

Delaware, M

a state sales

ict of Colum

e revenue estforecast had

umbia were e

or Nebraska and

as, Washingtona personal incoerformance of t

F A L L 2 0

es through th

in the three

of states repo

aine and Ne

nt state reven

tion on the p

34 percent o

me tax.2

a reported th

he latesthad not revis

lumbia raise

estimates.

ed estimate.

arget, even

North Dakot

estimates.

eginning of

llections belo

at had been r

ome tax perf

ent of state o

ontana, New

tax.

ia saw gener

imate (see figot been revis

xceeding

New Mexico.and Wyominge tax, but tax ine personal inco

1 2

e first quarter

major taxes---

rt that they e

w Jersey repo

e performan

erformance o

state own-so

t

d

a,

w target. Ari

viseddownwormance.

wn-

l

red.

o not levy a perterest income ane tax.

of FY 2013.

personal

pect to meet

rted all three

ce for persona

other taxes i

urce revenues.

ona, Idaho a

ard.

onal income tax.d dividends.

or

l

d


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Table

Corpo

On av

Alaska

collect

do not

Table

Other

States

gas prgambli

increased es

Fifteen stat

North Dak

Arizona, R

In 15 states

meet a targ

revenues w

2 contains m

rate Income

erage, corpora

and New Ha

ions. Six state

levy a corpor

Eighteen stKansas, Ma

revenues ab

Fourteen st

in on target

Oregon, R

Carolina w

been revise

had reduce

Corporate ibelow the l

the District

failing to m

raised and

the District

3 contains m

Taxes

also rely on a

duction, realng, estates an

Two states

severance ta

below the l

S T A

timates. Haw

s saw collecti

ta and Wyo

ode Island a

, sales tax rev

t that had be

re below a re

re informati

axes

te income tax

mpshire, how

sNevada,

ate income ta

tes saw corpryland and

ove a lowered

ates saw colle

. Delaware,

ode Island a

re meeting ta

upward, wh

its estimate.

ncome tax cotest target in

of Columbia

eet a target t

rizona, Con

of Columbia

re informati

variety of mis

estate transfed others.

reported seve

xes coming i

test estimate.

E B U D

aii was excee

ons coming i

ing were me

d Washingto

nues were co

en raised, whi

uced forecas

n on general

es account fo

ever, depend

hio, South

x.

rate incomeest Virginia,

forecast (see

tions coming

orth Dakota,

d South

rgets that ha

ile California

llections were10 states and

. Idaho was

at had been

ecticut and

were below a

n on corpora

cellaneous ta

rs, tobacco,

ance taxes pe

on target, a

E T U P

ing lowered

on target. C

eting targets

n were meeti

ming in belo

le Connectic

.

sales tax perf

r about 5 per

on them for

akota, Texas,

ax receipts abhich raised

Figure 3).

reduced esti

te income tax

es for revenu

eals and roo

rforming abo

d in nine sta

A T E : F

stimates.

alifornia, Ma

hat had been

g reduced est

estimate. Id

t and New Y

rmance.

ent of state t

ore than 10

Washington

ove estimate,heir forecasts.

ate.

performance.

e. These inclu

s, insurance

e estimate.

es these taxes

A L L 2 0 1

yland, Missis

revised upwa

imates.

ho was failin

ork reported

x collections.

percent of

and Wyomin

including IoHawaii repo

de taxes on o

remiums,

ight states sa

were coming

2 | 3

sippi,

d.

to

g

a,rted

il and

in


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4| S T

Sc

J

Si

It

Tables 4,

RevenuRevenue

sense of f

trough of

continued

pessimism

FY 2013.

Ta

fi

t

Fo

Te

Table 7 p

outlooks

Areas oGenerally

facing spe

area of sp

Twenty-t

states indi

examples

si

T E B U

eventeen state

ming in on t

rsey and Pen

even states sa

clude gamin

five states, o

at collection

5 and 6 cont

e Outlookerformance i

ture expectat

the recession,

improvemen

, a handful o

hirty-three st

d are likely t

gure 4).

fficials in sev

eir projectio

iscal directors

utlook as opti

heir optimisceeding proj

fficials in fou

ew Yorkar

ovides furthe

or the remain

Spendinstate spendin

nding overru

nding is signi

o states repo

cated that it i

f spending a

edicaid and

x at this time

G E T U

s and the Dis

arget or abov

sylvaniare

other miscel

taxes in Nev

ther tax sourc

were below t

in more info

for the Rea key indica

ions. For mos

and the outl

t. However, i

state officials

tes and the

o meet FY 20

en states are c

s.

in six states

mistic for the

is based onctions.

r statesAlas

e pessimistic

r details on st

der of the fisc

Over Bug is in line wi

s than at this

ficantly over

rted that no a

unknown if

eas over bud

ther health c

last year. Tex

D A T E :

trict of Colu

expectations

ported transfe

laneous taxes

ada and the f

es were comi

he latest targe

mation on t

mainder oor of the stat

t states, reven

ok for the re

a change fr

believe they

istrict of Col

13 revenue es

oncernedabo

escribed their

remainder o

ollections th

ka, Maine, N

bout the rev

ate general fu

al year.

geth budgeted e

time last yea

budget in FY

reas of the bu

any program

et include:

re programs

as notes that

F A L L 2 0

bia reported

. Only four st

r taxes below

performing a

anchise tax i

g in on targe

t.

ese taxes.

FY 2013fiscal situati

ues continue

ainder of th

m last year w

are unlikely t

umbia report

timates (See

ut meeting

revenue

the fiscal yea

t are

ew Jersey and

nue outlook.

nd revenue

stimates, tho

. Eighteen st

2013 compar

dget are over

areas are over

are over budg

hen balanci

1 2

real estate tra

atesHawaii

the current f

bove estimate

Texas.

t, while 10 st

n, so it is im

their slow cli

e budget year

hen no states

meet the re

d that reven

r.

gh more stat

tes reported

ed to 11 state

pent at this ti

budget for F

et in 10 state

g the 2012-1

nsfer taxes

, Maine, Ne

recast.

. Examples

tes reported

ortant to get

b out of the

indicates

reported

enue forecast

es are stable

s appear to b

hat at least o

s in FY 2012.

me, and 11

2013. Some

, compared t

3 biennial

a

in

e

e


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S T A T E B U D G E T U P D A T E : F A L L 2 0 1 2 | 5

budget, Medicaid was underfunded by approximately $4.3 billion. West Virginia

estimates that Medicaid is $180 million over budget in FY 2013, and Maine notes

that despite declining caseloads, Medicaid spending continues to increase.

California, Connecticut, Georgia, Iowa, Maryland, Nevada, and Virginia also report

overspending on Medicaid or other health care benefits.

Education spending, either K-12 or higher, is over budget in five states. Kansasreported that additional funding will be needed to maintain the current level of base

state aid per pupil expenditures, and New Hampshire indicated that charter school

appropriations are estimated to exceed budgeted appropriations by 58 percent.

California, Maryland and Montana also indicated that education spending was over

budget.

Idaho, Maryland, Mississippi, and Vermont reported that corrections programs wereover budget thus far in FY 2013.

The western states of California, Montana and Wyoming indicated that firesuppression costs were over budget due largely to wildfires this past summer.

Table 8 provides additional information on areas of spending significantly over budget.

Summary of the State Fiscal SituationThe slowly improving economic situation in the states has caused legislative fiscal directors to

describe their fiscal situation as being generally stable. Officials frequently used terms such as

improving and stable growth to describe the current fiscal situation in their states. Also,

a small but increasing number of officials used more positive descriptions such as strong

and cautiously optimistic to describe their states. At the same time, a few officials used less

optimistic terms such as precarious and underperforming to describe their fiscal situation

and the use of the term budget gap has crept back into the lexicon. Examples from

officials in a few states include:

Alaska officials reported that they may have their first deficit since FY 2005. In California, the situation is stable, with projected operating surpluses in the out-

years, a notable change from the states recent multi-billion gap situation.

Officials in Hawaii describe their fiscal situation as razors edge because theprojected general fund balance and reserves are inadequate and susceptible to any

unanticipated economic or fiscal shocks.

Officials in Delaware, New Hampshire, Ohio, and Oregon are cautiously optimisticregarding their respective fiscal situations.

In Kansas, officials noted that the state economy is showing consistent, but slowgrowth.

Officials in Maine describe their fiscal situation as precarious with little on thehorizon that would result in an improvement.

North Carolina officials reported that revenues have stabilized and are returning tolong-term growth trends.

Officials in Oklahoma noted that their fiscal situation is stable with a sense ofoptimism for continued improvement and stability.


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6| S T

Table 9 p

ProjectOne way

return to

When did

exceed th

does not a

policyma

reach pre-

FY 2008

After year

to recover

collection

of the stat

The follo

informati

projected

collection

Ta

p

t

st

2

a

r

y

Sp

w

2

r2

3It is impor

are subject t

T E B U

ovides summ

d Returno view the he

heir previous

nominal stat

t previous le

djust for base

ers point of

recession leve

arked the pe

-over-year de

and by the cl

. While this i

es a return to

ing highligh

n about the

return to pea

.

wenty-five st

e projected t

eak revenue c

e close of FY

ates returned

011, 13 in F

ditional stat

turn in the c

ar.

ix states expec

eak collection

hile another

fficials in Ma

016 and FY 2

venue levels011 and impl

tant to note that

change.

G E T U

ary informati

to Peak Ralth of state fi

peak levels.

e revenue coll

el? There are

or rate chang

iew, it can b

ls.

ak year of no

lines in FY 2

ose of FY 201

s certainly go

peak is not p

s provide

eturn or

revenue

tes have or

return to

ollections by

2013. Six

to peak in FY

2012 and six

s anticipate a

rrent fiscal

t a return to

s in FY 2014,

our project a

ine and Arizo

018, respecti

as delayed bemented in F

the predictions

D A T E :

n on the cur

venue Colnances is to c

his is a prett

ections peak

some obviou

es nor accou

helpful to k

inal revenu

09 and FY 2

3 at least hal

d news, it is

ojected until

return in FY

na do not pr

ely. Officials

significant i2013.

re based on cur

F A L L 2 0

rent state fisc

lectionsonsider when

simple and s

nd when are

s limitations t

t for the effe

ow when col

collections i

010,state reve

of the states

tempered by

at least FY 20

015.

ject a return

in Maine not

come and es

ent economic fo

1 2

l situation.

revenues are

traightforwar

they expected

o this assess

ts of inflatio

lections are p

all but a ha

nue collectio

ill have retu

he fact that f

14 or beyon

to peak collec

e that the ret

ate tax reduc

recasts and existi

expected to

comparison

to reach or

ent since it

. But from a

ojected to

dful of states.

s slowly bega

rned to peak

r the other h

(see figure 5)

tions until FY

rn to peak

tions passed i

ng tax law, whic

:

n

alf

.3

h


11/48


Eleven states currently do not have predictions for when tax collections will returnto peak levels. In Louisiana and Utah, for example, a return to peak is not on the

current forecast horizon. In Michigan, FY 2014 revenue is forecasted to be 13.3

percent below the previous peak of FY 2000.

In Alaska, the District of Columbia and North Dakota, a return to peak is notapplicable. In the District of Columbia and North Dakota, revenues never fell on ayear-over-year basis, while officials in Alaska noted that the state is unlikely to ever

see the revenue levels experienced in FY 2008 when oil prices were very high and

production was higher on a downward trend line.

State General Fund Revenue Recovery: A Historical Comparison.It has been repeated time and time again: The Great Recession was the longest and worst

economic downturn since the Great Depression. But what about the recovery after the

recession? Unlike previous recoverieswhere it was common to see a robust upturnthe

post-Great Recession period feels more like malaise than a recovery for states. One way to

demonstrate how different the current recovery has been from the past is to look at stategeneral fund revenue collections both in the length of time to return to peak (cumulatively)

and by comparing the percentage growth rates by state to those of previous recoveries.4

Cumulative State General Fund Revenues Return to Peak

While the individual state expectations for return to peak revenue collections provide

valuable insight on the wide variations of recovery across the U.S., looking at the cumulative

return to peak allows for historical comparisons.

The recession of July 1990 to March 1991: State general fund revenue collectionspeaked at the end of FY 1990 and as the country entered the recession, cumulative

state general fund revenues fell on a year-over-year basis before returning to peak injust one fiscal year, FY 1992.

The recession of March to November 2001: General fund revenue collections reachedtheir then peak in FY 2001, fell in FY 2002, and returned to peak two years later in

FY 2004.

The recession of December 2007 to June 2009: As previously mentioned, FY 2008marked the peak year of nominal revenue collections, thenin contrast to previous

recessionsstate general fund collections experienced two consecutive years of year-

over-year declines in FY 2009 and FY 2010. Despite steady growth in FY 2011 and

FY 2012, state general fund revenues had only inched closer to their pre-recessionpeak. FY 2013 cumulative general fund revenue collections are projected to finally

4Additional information on state general fund revenues, economic downturns and recoveries will be available in a

forthcoming brief.


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8| S T

r

d

General F

Legislativ

end of the

analysis isin demon

g

a

p

i

st

r

n

I

a

p

However,

example, irecoveries,

growth ra

to tax poli

The devas

that will r

will be eas

T E B U

turn to the F

ecline.

und Revenue

fiscal officer

Great Recess

complicatedtrating the hi

fficials in 27

neral fund re

e lower than

revious recov

urrent recove

-line with hi

ates.

fficials in fou

venue recove

orms.

nine states a

olumbia stat

ake the com

plicablem

olicy changes.

these numbe

n Arizona, wthe depth of

es. In Califor

cy changes.

tating impact

emain fond i

y to erase.

G E T U

2008 peak

Recovery Gr

were asked h

ion compares

due to tax ratstorical signif

states reporte

venue growth

growth rates

ries (see figur

ry growth rat

toric norms i

r states noted

ry is above his

nd the Distri

officials coul

arison or it w

st often due

s understate

ile statisticallthe Great Re

nia, New Ha

of the Great

memories of

D A T E :

five years si

owth Rates

ow the rate o

to previous e

/base changeicance of the

that

rates

rom

e 6).

s are

10

that

toric

t of

d not

as not

to tax

he tepid reco

y the currentession makes

pshire and

Recession an

state lawmak

F A L L 2 0

ce state reve

f general fun

conomic reco

; however, threat Recessi

ery experien

recovery is stit easier to g

ew York a c

subsequent

ers; and, unf

1 2

ues began th

revenue gro

veries. In ma

is information.

ed by the sta

onger than pnerate higher

mparison is

rotracted rec

rtunately, it i

ir precipitou

th since the

y cases this

is still useful

es. For

eviousrecovery

ot possible d

overy is not o

s not one tha

e

ne


13/48


TABLE 1.PERFORMANCE OF MAJORTAXCATEGORIES IN FY2013:PERSONAL INCOME TAX

State/Jurisdiction Through

Revised Performance

CommentNo Up DownAboveEstimate

OnTarget

BelowEstimate

Alabama September Estimates for FY 2013, which began Oct. 1,2012, have not yet been revised to reflectactual collections for FY 2012.

Alaska Not Levied

Arizona September

Arkansas October The personal income tax is 5 percent aboveFY 2012 collections.

California October The revised forecast is based on LegislativeAnalysts Offices (LAO) November 2012Fiscal Outlook report and does not includeformal monthly projections, so all revenuesare "on target" for the revised estimates. NetFY 2012 and FY 2013 personal income tax

collections are below 2012-13 budget actassumptions. Voters passed the Governor'stax initiative (Proposition 30) in November2012. Proposition 30 increases sales and usetaxes for all taxpayers and personal incometaxes for high-income taxpayers. Because ofthe new revenue accrual policies relating toProposition 30, the books will not be closedon FY 2012 until at least a year from now.

As of October 2012, personal income taxreceipts for FY 2013 are $422 million (2.9percent) above Department of Financemonthly projections. Comparisons of theLAO revenue forecast to the budget act

revenue forecast are listed in Figure 9, page21, of the Fiscal Outlook report.

Colorado September Year-to-date, actual figures for all taxes areslightly above estimates but within themargin of error.

Connecticut October

Delaware September For FY 2013, the September 2012 forecastwas $7 million higher than the June 2012forecast.

District ofColumbia

September

Florida Not Levied

Georgia September Growth of 2.7 percent but below the budgettarget of approximately 5 percent.

Hawaii September The state's Council on Revenues makes anaggregate projection for general fundrevenues. Preliminary actual tax collectiondata is available for the individual incometax.


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10| S T A T E B U D G E T U P D A T E : F A L L 2 0 1 2



Revised Performance


OnTarget

BelowEstimate

Idaho October The personal income tax is below estimateby 0.1 percent ($560,100). Year-to-date,total tax collections are down 0.8 percent($6.9 million).

Illinois September Overall, the large economically related taxsources are performing about as expected.

Indiana October

Iowa October

Kansas October Officials revised revenue estimates on Nov.4, 2012, and the revised estimate is $60.8million (2.1 percent) below the previousestimate. Officials lowered the overallestimate by only $5.2 million or 0.1

percent. While not a major change, therewere significant shifts between revenuesources.

Kentucky September

Louisiana October

Maine October The revenue forecast was updated on Dec.1, 2012. Overall, the forecast was reviseddownward by $35 million.

Maryland September

Massachusetts September Year-to-date, total personal incomecollections are tracking $63 million below

benchmark. September was the first monththis fiscal year in which income taxcollections came in slightly above monthlybenchmarks ($8 million above the monthlybenchmark). Through September, year-to-date total tax collections are $95 millionbelow benchmarks.

Michigan October Below estimate due to weak Octobercollections, otherwise on-target.

Minnesota September The most recent state budget forecast was inFebruary 2012. The next forecast will be inDecember 2012. Through September,revenues in all major categories are

exceeding forecasted amounts.

Mississippi October The forecast was recently revised inNovember 2012, so all revenues are "ontarget" for the revised estimates.For thecurrent fiscal year, the personal income taxis exceeding expectations.

Missouri October

Montana October The personal income tax is 8.5 percenthigher than forecast.


15/48




Revised Performance


OnTarget

BelowEstimate

Nebraska October Because revisions to the forecast were madeOct. 26, 2012, there has not been enoughtime to evaluate performance.

Nevada Not Levied

New Hampshire Not Levied

New Jersey September The personal income tax is below theforecasted growth target of 5.7 percent. Allmajor tax revenue sources for FY 2013 areunderperforming the rather robust growthrates (as recalculated by Office of LegislativeServices and based upon its understandingof FY 2012 final collections) necessary toachieve target amounts certified by theexecutive in June. Overall growth of 8.4

percent above FY 2012 levels is required,but through September, the current overallgrowth is only 1.9 percent. Preliminary,unofficial revenue growth for FY 2012 wasbelow 3 percent.

New Mexico Receipts are not yet available for FY 2013.

New York September The forecast is expected to be revised downin the mid-year update.

North Carolina September Through September, general fund revenuecollections are above a $4.79 billion targetby $1 million.

North DakotaSeptember

Ohio October

Oklahoma September The personal income tax is performingmoderately above estimate.

Oregon September

Pennsylvania September Year-to-date, FY 2013 total general fundcollections were above the official estimateby 0.2 percent.

Rhode Island October The forecast was revised on Nov. 9, 2012,so all revenues are "on target" for the revisedestimates.

South Carolina October

South Dakota Not Levied

Tennessee September Tennessee levies a limited personal incometax on interest and dividends only.

Texas Not Levied

Utah October


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Revised Performance


OnTarget

BelowEstimate

Vermont October Officials are hopeful it is a timing issue forthe month targets. Overall, collections areon target with the current, July 2012,adopted forecast (a new forecast will bemade available in January 2013).

Virginia September Withholding is down and is related in partto two fewer deposit days in September;non-withholding is up slightly. Year-to-date,overall growth for the first quarter is 0.4percent, against a forecast of 2.7 percent.

Washington Not Levied

West Virginia September Personal income is above forecast by $3.2million. As of Sept. 30, 2012, total generalfund revenue is $4.6 million below estimate.

Wisconsin October

Wyoming Not Levied

Total 28 10 5 13 15 13

Source: NCSL survey of legislative fiscal offices, fall 2012.


17/48


TABLE 2.PERFORMANCE OF MAJORTAXCATEGORIES IN FY2012:GENERALSALES &USE


Revised Performance


OnTarget

BelowEstimate

Alabama September Estimates for FY 2013, which began Oct.1, 2012, have not yet been revised to reflectactual collections for FY 2012.

Alaska Not Levied

Arizona September

Arkansas October The general sales tax is 4.4 percent belowforecast.

California October The revised forecast is based on LegislativeAnalysts Offices (LAO) November 2012Fiscal Outlook report and does not includeformal monthly projections, so all revenuesare "on target" for the revised estimates.Net FY 2012 and FY 2013 sales and use

tax collections are above 2012-13 budgetact assumptions. Voters passed theGovernor's tax initiative (Proposition 30)in November 2012. Proposition 30increases sales and use taxes for alltaxpayers and personal income taxes forhigh-income taxpayers. Because of the newrevenue accrual policies relating toProposition 30, the books will not beclosed on FY 2012 until at least a yearfrom now. As of October 2012, sales anduse tax receipts are $5 million (0.1 percent)below Department of Finance monthly

projections. Comparisons of the LAOrevenue forecast to the budget act revenueforecast are listed in Figure 9, page 21, ofthe Fiscal Outlook report.

Colorado September Year-to-date, actual figures for all taxes areslightly above estimates but within themargin of error.

Connecticut October

Delaware Not Levied

District ofColumbia

September

Florida September

Georgia September Growth of 3.5 percent but below thebudget target of approximately 5 percent.

Hawaii September The state's Council on Revenues makes anaggregate projection for general fundrevenues. Preliminary actual tax collectiondata is available for the general excise tax.


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Revised Performance


OnTarget

BelowEstimate

Idaho October The sales tax is below estimate by 1.4percent ($5.6 million). Year to date, totaltax collections are down 0.8 percent ($6.9million).

Illinois September Overall, the large economically related taxsources are performing about as expected.However, the sales tax is somewhat weakerthan hoped, while corporate income issomewhat stronger.

Indiana October

Iowa October

Kansas October Officials revised revenue estimates on Nov.4, 2012, and lowered the overall estimate

by only $5.2 million or 0.1 percent. Whilenot a major change, there were significantshifts between revenue sources.

Kentucky September

Louisiana October


Maryland September

Massachusetts September Year-to-date, sales and use tax collections

are tracking $21 million belowbenchmarks. Collections have consistentlycome in under benchmark since thebeginning of the fiscal year. ThroughSeptember, year-to-date total taxcollections are $95 million belowbenchmarks.

Michigan October

Minnesota September The most recent state budget forecast wasin February 2012. The next forecast will bein December 2012. Through September,revenues in all major categories areexceeding forecasted amounts.

Mississippi October The forecast for the sales tax was revisedslightly upward in November. Because ofthe recent revision, all revenues are "ontarget" for the revised estimates.

Missouri October

Montana Not Levied


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Revised Performance


OnTarget

BelowEstimate


Nevada August


New Jersey September The sales tax is below the forecastedgrowth target of 6.3 percent. All major taxrevenue sources for FY 2013 areunderperforming the rather robust growthrates (as recalculated by Office ofLegislative Services and based upon itsunderstanding of FY 2012 final collections)necessary to achieve target amounts

certified by the executive in June. Overallgrowth of 8.4 percent above FY 2012 levelsis required, but through September, thecurrent overall growth is only 1.9 percent.Preliminary, unofficial revenue growth forFY 2012 was below 3 percent.



North Carolina September Through September, general fund revenuecollections are above a $4.79 billion targetby $1 million

North Dakota September

Ohio October

Oklahoma September The sales tax is tax is performingmoderately above estimate.

Oregon Not Levied


Rhode Island October The forecast was revised on Nov. 9, 2012,so all revenues are "on target" for the

revised estimates.


South Dakota September Sales tax collections are slightly aboveforecast.

Tennessee September


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Revised Performance


OnTarget

BelowEstimate

Texas September Sales, motor vehicle sales, natural gas, oilproduction, business franchise, andinsurance tax collections all exceededestimates in FY 2012, which ended on

Aug. 31, 2012.

Utah October

Vermont October Overall, collections are on target with thecurrent, July 2012 adopted forecast (a newforecast will be available in January 2013).

Virginia September Year-to-date, sales tax growth is 4.2 percentcompared to a forecast of 1.7 percent.

Year-to-date, overall growth for the firstquarter is 0.4 percent, against a forecast of2.7 percent.

Washington October Forecast reflects a relatively smalldownward adjustment. This information isbased on the November 2012 revenueforecast, which is pretty close to therevenue forecast in September 2012.

West Virginia September The sales tax is $2.5 million over estimate.As of Sept. 30, 2012, total general fundrevenue is $4.6 million below estimate.

Wisconsin October

Wyoming September

Total 31 9 6 14 15 15



21/48


TABLE 3.PERFORMANCE OF MAJORTAXCATEGORIES IN FY2012:CORPORATE INCOME


Revised Performance


OnTarget

BelowEstimate


Alaska October The official revised forecast will be releasedin December.

Arizona September

Arkansas October Corporate income is 0.1 percent belowforecast.

California October The revised forecast is based on LegislativeAnalysts Offices (LAO) November 2012Fiscal Outlook report and does not includeformal monthly projections, so all revenuesare "on target" for the revised estimates.

While the net FY 2012 and FY 2013corporation tax forecast is below 2012-13budget act assumptions, Proposition 39,passed by voters in November 2012, willpartially offset that weak performancebeginning in FY 2013. As of October2012, corporation tax receipts are $277million (18.7 percent) below Departmentof Finance monthly projections.Comparisons of the LAO revenue forecastto the budget act revenue forecast are listedin Figure 9, page 21, of the Fiscal Outlookreport.

ColoradoSeptember

Year-to-date, actual figures for all taxes areslightly above estimates but within themargin of error.

Connecticut October

Delaware September For FY 2013, the September 2012 forecastwas $7.3 million higher than the June2012 forecast.

District ofColumbia

September

Florida September

Georgia September

Hawaii September The state's Council on Revenues makes anaggregate projection for general fundrevenues. Preliminary actual tax collectiondata is available for corporate income tax.

Idaho October The corporate income tax is below estimateby 13.2 percent ($6.9 million). Year-to-date, total tax collections are down 0.8percent ($6.9 million).


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Revised Performance


OnTarget

BelowEstimate

Illinois September Overall, the large economically-related taxsources are performing about as expected.However, the sales tax is somewhat weakerthan hoped, while corporate income issomewhat stronger.

Indiana October

Iowa October

Kansas October The revised estimate is $70 million (25.9percent) above the previous estimate.Officials revised revenue estimates on Nov.4, 2012, and lowered the overall estimateby only $5.2 million or 0.1 percent. Whilenot a major change, there were significantshifts between revenue sources

Kentucky September

Louisiana October


Maryland September

Massachusetts September Year-to-date, corporate and business taxcollections are generally on target, tracking$1 million above benchmark. Julycollections were $20 million above themonthly benchmark. However, officials

have seen collections diminish throughAugust and September, tracking $18million below the monthly benchmark forSeptember. Through September, year-to-date total tax collections are $95 millionbelow benchmarks.

Michigan October


Mississippi October The forecast was recently revised inNovember 2012, so all revenues are "ontarget" for the revised estimates.

Missouri October

Montana October The corporate income tax is 21 percenthigher than forecast.



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Revised Performance


OnTarget

BelowEstimate

Nevada Not Levied

New Hampshire September Corporate income is below forecast by 1.3percent.

New Jersey September The corporate income tax is below theforecasted growth target of 26.2 percent.

All major tax revenue sources for FY 2013are underperforming the rather robustgrowth ratesas recalculated by Office ofLegislative Services and based upon itsunderstanding of FY 2012 finalcollectionsnecessary to achieve targetamounts certified by the executive in June.Overall growth of 8.4 percent above FY2012 levels is required, but through

September, the current overall growth isonly 1.9 percent. Preliminary, unofficialrevenue growth for FY 2012 was below 3percent.



North Carolina September Through September, general fund revenuecollections are above a $4.79 billion targetby $1 million.


Ohio Not Levied

Revenue from Ohio's commercial activitytax, a gross receipts tax that replaced a taxon corporate income, is on target.

Oklahoma September Collections for the first quarter are aboveestimates by over 80 percent.

Oregon September


Rhode Island October The forecast was revised on Nov. 9, 2012,so all revenues are "on target" for therevised estimates.



Tennessee September

Texas Not Levied

Utah October


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Revised Performance


OnTarget

BelowEstimate

Vermont October Corporate income tax collections are overtarget by $4 million. Overall, collectionsare on target with the current, July 2012,adopted forecast (a new forecast will bemade available in January 2013).

Virginia September Tobacco, financial activities andtelecommunications are dragging downcorporate income performance. Year-to-date, overall growth for the first quarter is0.4 percent, against a forecast of 2.7percent.

Washington Not Levied Washington levies a business andoccupation or gross receipts tax on businessincome rather than an actual corporate

income tax.West Virginia September Corporate income is $6.8 million over

estimate. As of Sept. 30, 2012, totalgeneral fund revenue is $4.6 million belowestimate.

Wisconsin October

Wyoming Not Levied

Total 29 10 6 18 14 11



25/48


TABLE 4.PERFORMANCE OF MAJORTAXCATEGORIES IN FY2012:SEVERANCE1


Revised Performance


OnTarget

BelowEstimate


Alaska October The official revised forecast will be releasedin December. Both production and priceof oil are lower than the forecast, so therevenue forecast is likely to be reviseddownward.

Arizona Not Available

Arkansas Not Levied

California Not Levied

Colorado September Year-to-date, actual figures for all taxes are

slightly above estimates but within themargin of error.

Connecticut Not Levied

Delaware Not Levied

District ofColumbia

Not Levied

Florida September

Georgia Not Levied

Hawaii Not Levied

Idaho Not Levied

Illinois Not Available

Indiana Not Levied

Iowa Not Levied

Kansas October The revised estimate is $19.7 million (16.4percent) below the previous estimate.Officials revised revenue estimates on Nov.4, 2012, and lowered the overall estimateby only $5.2 million or 0.1 percent. Whilenot a major change, there were significantshifts between revenue sources.

Kentucky September

Louisiana October

Maine October No collections have been budgeted in thenear-term. The revenue forecast wasupdated on Dec. 1, 2012. Overall, theforecast was revised downward by $35million.


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Revised Performance


OnTarget

BelowEstimate

Maryland Not Levied

Massachusetts Not Levied

Michigan October

Minnesota Not Levied

Mississippi October The forecast was recently revised inNovember 2012, so all revenues are "ontarget" for the revised estimates.

Missouri Not Levied

Montana October Oil and gas production is stable.

Nebraska Not Levied

Nevada Not Levied


New Jersey Not Levied


New York Not Levied

North Carolina Not Levied


Ohio Not Available No forecast is available.

Oklahoma September The severance tax is below estimatepartially because of significant payments oneligible drilling incentives that offset taxremittances. Natural gas prices haveremained, until recently, well belowbenchmark estimates for the year.

Oregon Not Levied

Pennsylvania Not Levied

Rhode Island Not Levied

South Carolina Not Available

South Dakota September

Tennessee September

Texas September Sales, motor vehicle sales, natural gas, oilproduction, business franchise, andinsurance tax collections all exceededestimates in FY 2012, which ended on

Aug. 31, 2012.

Utah October


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Revised Performance


OnTarget

BelowEstimate

Vermont Not Levied

Virginia Not Levied

Washington Not Levied

West Virginia September The severance tax is $24.4 million belowestimate. As of Sept. 30, 2012, totalgeneral fund revenue is $4.6 million belowestimate.

Wisconsin Not Levied

Wyoming September One full month of data is currentlyavailable.

Total 17 2 1 2 8 9

1According to the Commerce Clearing House State Tax Guide, 39 states collect severance taxes under a variety of different tax titles. Many of these eitheraccount for a relatively small portion of general fund collections, are not be deposited into the general fund or may not be forecasted. For moreinformation on severance tax rates and collections please see: http://www.ncsl.org/issues-research/budget/2011-state-severance-tax-collections.aspx



28/48


TABLE 5.PERFORMANCE OF MAJORTAXCATEGORIES IN FY2012:REALESTATE TRANSFER1


Revised Performance


OnTarget

BelowEstimate


Alaska Not Levied

Arizona Not Levied

Arkansas Not Available

California Not Levied

Colorado Not Levied

Connecticut October

Delaware September For FY 2013, the September 2012 forecast

was $1.4 million higher than the June2012 forecast.

District ofColumbia

September

Florida September

Georgia Not Levied

Hawaii September The state's Council on Revenues makes anaggregate projection for general fundrevenues. Real estate transfer is included inaggregate projection, but no preliminarymonthly data is available.

Idaho Not Levied

Illinois Not Available

Indiana Not Levied

Iowa Not Levied

Kansas Not Levied

Kentucky Not Levied

Louisiana Not Levied

Maine October October showed improvement, but still

under budget. The revenue forecast wasupdated on Dec. 1, 2012. Overall, theforecast was revised downward by $35million.

Maryland September

Massachusetts Not Levied

Michigan October


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Revised Performance


OnTarget

BelowEstimate


Mississippi Not Levied

Missouri Not Levied

Montana Not Levied

Nebraska Not Levied

Nevada Quarterly real estate transfer revenue hasnot been reported at this time.

New HampshireSeptember

Real estate transfer is above forecast by 3.6percent.

New Jersey September The real estate transfer tax is below theforecasted growth target of 27.7 percent.

All major tax revenue sources for FY 2013are underperforming the rather robustgrowth rates (as recalculated by Office ofLegislative Services and based upon itsunderstanding of FY 2012 final collections)necessary to achieve target amountscertified by the executive in June. Overallgrowth of 8.4 percent above FY 2012 levelsis required, but through September, the

current overall growth is only 1.9 percent.Preliminary, unofficial revenue growth forFY 2012 was below 3 percent.

New Mexico Not Levied


North Carolina A real estate transfer tax is levied but it islocally administered. The state does receivea share of the tax proceeds, but they aredeposited into a dedicated special trustfund for natural heritage preservation; so, itis not a general fund revenue source.

North Dakota Not Levied

Ohio Not Available No forecast is available.

Oklahoma September

Oregon Not Levied



30/48




Revised Performance


OnTarget

BelowEstimate

Rhode Island October The forecast was revised on Nov. 9, 2012,so all revenues are "on target" for therevised estimates.



Tennessee September Performance data is not available.

Texas Not Levied

Utah Not Levied

Vermont October Overall, collections are on target with thecurrent, July 2012, adopted forecast (a newforecast will be made available in January

2013).

Virginia September Year-to-date, overall growth for the firstquarter is 0.4 percent, against a forecast of2.7 percent.

Washington October Forecast reflects a relatively small upwardadjustment. This information is based onthe November 2012 revenue forecast,

which is pretty close to the revenue forecastin September 2012.

West Virginia September As of Sept. 30, 2012, total general fundrevenue is $4.6 million below estimate.

Wisconsin

October

Wyoming Not Levied

Total 18 5 1 7 11 41According to the Commerce Clearing House State Tax Guide, 37 states and the District of Columbia collect real estate transfer taxes. Many of theseaccount for a relatively small portion of general fund collections, are not be deposited into the general fund or may not be forecasted. For moreinformation on real estate transfer tax rates and collections please see: http://www.ncsl.org/issues-research/budget/real-estate-transfer-taxes.aspx



31/48


TABLE 6.PERFORMANCE OF MAJORTAXCATEGORIES IN FY2012:OTHER

State/Jurisdiction Tax Through

Revised Performance


OnTarget

BelowEstimate

Alabama No ResponseAlaska Petroleum

production/royalties

October The official revised forecastwill be released in December.Both production and price ofoil are lower than the forecast,so the revenue forecast is likelyto be revised downward.

Arizona No Response

Arkansas No Response

California No Response

Colorado No Response

Connecticut No Response

Delaware GrossReceipt

September For FY 2013, the September2012 forecast was $5.8million less than the June2012 forecast.

District ofColumbia

No Response

Florida HighwaySafety Fees

September

Georgia Motor Fuel September Below forecast because of ananomaly reflecting a freeze onthe rate.

Hawaii Tobacco,Alcohol,franchiseandnumerousothers

September The state's Council onRevenues makes an aggregateprojection for general fundrevenues. Preliminary actualtax collection data is availablefor the other taxes, whichinclude tobacco, alcoholfranchise and numerous othersmaller categories.

Idaho Product &Misc.

October Above forecast by 22 percent($6.1 million). Year-to-date,

total tax collections are down0.8 percent ($6.9 million).

Illinois No Response

Indiana Gaming October


32/48




Revised Performance


OnTarget

BelowEstimate

Iowa Inheritance,

InsurancePremium,Cigarette,Tobacco,Beer,Franchise

October All revised slightly upward.

Kansas No Response

Kentucky No Response

Louisiana No Response

Maine No Response

Maryland No Response

Massachusetts Unspecified September Year-to-date, other taxcollections are tracking $12million below benchmarks.Through September, year-to-date total tax collections are$95 million belowbenchmarks.

Michigan No Response

Minnesota No Response

Mississippi Gaming October Gaming remains flat. The

forecast was recently revised inNovember 2012, so allrevenues are "on target" forthe revised estimates.

Missouri No Response

Montana No Response

Nebraska Misc. October Because revisions to theforecast were made Oct. 26,2012 there has not beenenough time to evaluateperformance.

Nevada GrossGaming October


33/48




Revised Performance


OnTarget

BelowEstimate

New

Hampshire

Meals and

rentals,tobacco,liquor,interest anddividends,communications, as

well asothermiscellaneous revenuesources.

September Overall, other taxes were

below forecast byapproximately 0.4 percentthrough September.Specifically, the meals andrental tax was above forecastby 7.7 percent, tobacco belowby 10.9 percent, interest anddividends above by 4.9percent and thecommunication tax was belowby 11.5 percent.

New Jersey Transfer &

Inheritance

September Below the targeted growth of

12.9 percent. All major taxrevenue sources for FY 2013are underperforming therather robust growth rates (asrecalculated by Office ofLegislative Services and basedupon its understanding of FY2012 final collections)necessary to achieve targetamounts certified by theexecutive in June. Overallgrowth of 8.4 percent aboveFY 2012 levels is required, butthrough September, the

current overall growth is only1.9 percent. Preliminary,unofficial revenue growth forFY 2012 was below 3 percent.

New Mexico Rents andRoyalties

Receipts are not yet availablefor FY 2013.

New York Misc.Receipts,Estate

September Above estimate due to largefines received as a result oflawsuits against two majorbanks.

NorthCarolina

North Dakota

Ohio Cigarette

Commer-cial Activity

October

Oklahoma MotorVehicleCollections

September Year to date, slightly belowestimate.


34/48




Revised Performance


OnTarget

BelowEstimate

Oregon

Pennsylvania Inheritance September Year-to-date, FY 2013 totalgeneral fund collections wereabove the official estimate by0.2 percent.

Rhode Island No Response

SouthCarolina

No Response

South Dakota No Response

Tennessee Gasoline September

TexasSeptember Sales, motor vehicle sales,

natural gas, oil production,business franchise, andinsurance tax collections allexceeded estimates in FY2012, which ended on August31, 2012.

Utah No Response

Vermont No Response

Virginia No Response

Washington Business &

Occupation

Property

October

Washington levies a business

and occupation or grossreceipts tax on businessincome rather than an actualcorporate income tax. Forecastreflects a relatively smalldownward adjustment. Thisinformation is based on theNovember 2012 revenueforecast, which is pretty closeto the revenue forecast inSeptember 2012.

West Virginia No Response

Wisconsin No Response

Wyoming No Response

Total 15 4 3 7 5 10



35/48

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36/48


TABLE 7.REVENUE OUTLOOK FOR THE REMAINDER OF FY2012

State/Jurisdiction Pessimistic Concerned Stable Optimistic Comments

Kentucky

Louisiana Corporate strength may offset weakness in the salesand personal income tax.

Maine Most major taxes were below projections for the firstthird of FY 2013.

Maryland

Massachusetts Stable but concerned. The administration announcedthe possibility of a future revenue downgrade in itsfirst quarter update to the legislature.

Michigan

Minnesota Revenues have exceeded the forecasted amount by$145 million (4 percent) for the first quarter of FY2013.

Mississippi

State general funds continue to grow over the prioryear.

Missouri

Montana Currently at 3.8 percent above projections.

Nebraska

Nevada

New Hampshire During the 2012 legislative session various changeswere made to business taxes, as well as the interest anddividends tax and the communication services tax.These changes have the potential to decrease overalltax revenue by several million dollars in FY 2013.

New Jersey Prior to the occurrence of Hurricane Sandy, the Officeof Legislative Services believed that FY 2013 certifiedtargets would be difficult to achieve. The Office ofLegislative Services remains pessimistic, butacknowledges that the storm's impact on the state'seconomy and fiscal condition is unclear at this time.

New Mexico

New York

North Carolina The only pending concern is the federal fiscal cliff andthe potential drag it may have on the U.S. economy inthe first quarter and possibly the second quarter of2013.

North Dakota

Ohio Through October, general fund tax revenues wereabout 1.2 percent above estimate.


37/48


TABLE 7.REVENUE OUTLOOK FOR THE REMAINDER OF FY2012

State/Jurisdiction Pessimistic Concerned Stable Optimistic Comments

Oklahoma Energy prices and the direction of the nationaleconomy will continue to dictate the outlook for thebalance of the fiscal year. The state economy isperforming reasonably well and barring a measurable

change, expectations are for continued health in staterevenue collections.

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas FY 2013 revenue estimates will be revised in January2013. The overall general revenue estimate likely willbe revised upward based on the higher than expectedFY 2012 baseline.

Utah

Vermont

Virginia Officials will likely make a slight upward adjustmentto the FY 2013 forecast.

Washington FY 2013 revenue collections are meeting forecastexpectations. Like many states, officials are projectinga slow or sluggish economic recovery and concernscontinue over the impact of outside pressures (e.g. thefederal fiscal cliff, European debt crisis, etc.)

West Virginia

Wisconsin

Wyoming Severance tax collections remain a point of caution,but other revenue categories are showing stability.

Total 4 7 34 6



38/48


TABLE 8.AREAS OF SPENDING SIGNIFICANTLYOVERBUDGET IN FY2013

State/Jurisdiction No Yes Unknown Comments

Alabama

Alaska

Arizona

Arkansas

California Education, (there were lower than expected savings from dissolution ofredevelopment agencies), Medicaid (Healthy Families Program, the statesChildrens Health Insurance Program), and wildfire-related costs are all overbudget. Refer to page 4 of Californias November 2012 Fiscal Outlook for morinformation.

Colorado As of October 23, 2012, the Legislative Council is not aware of any itemssignificantly over budget.

Connecticut Medicaid.

Delaware

District of Columbia

Florida

Georgia A deficit in Medicaid is forecast and will need to be addressed in the actual FY2013 budget.

Hawaii Unknown at this time.

Idaho Corrections.

Illinois

Indiana

Iowa The legislature underfunded Medicaid for FY 2013 by an estimated $61.0million, and agreed to address the issue during the 2013 session.

Kansas K-12 education is projected to require additional funding to maintain currentlevels of base state aid per pupil expenditures.

Kentucky

Louisiana

Maine Medicaid spending has increased despite a declining caseload. Medicaid spendiwas projected to decline in FY 2013. The extent of any shortfall will depend onthe timing and the successful implementation of many savings initiatives enactin the 2012 session.


39/48




Maryland As part of the Department of Legislative Services current services budget estim$123 million in potential current year deficiencies have been identified. Thisincludes $54 million in human resources (including $36 million in the deferrepayment of prior year spending and $12 million due to special and federal fundunderattainment); $18 million in Education (student test costs); $16 million fopublic safety ($9 million for overtime and $4 million for inmate food andsupplies); $12 million in juvenile services (per diem payments of $9 million anstaffing shortages totaling $3 million); $10 million in Health and MentalHygiene ($9 million for community provider payments); $10 million for higheeducation ($6 million for manpower and statewide program grants and $3million for the community college optional retirement program); and $3 millioin other agencies.

Massachusetts As a result of a recent state drug lab scandal, officials anticipate exposure acrossnumber of public safety and trial court accounts. Officials are still working tounderstand the scope of this potential exposure and its impact to budgeted funfor the remainder of the fiscal year. In addition, officials are aware of structuraldeficiencies in family homelessness services and indigent defense.

Michigan

Minnesota

Mississippi The Dept. of Corrections will require additional funds in FY 2013.

Missouri Unknown at this time. However, tornado damage funding in Joplin is possiblyover budget.

Montana Fire suppression costs ($47.5M) and K-12 inflationary ruling ($33.0M) are ovebudget.

Nebraska Unknown at this time as deficit requests were just recently received.

Nevada Medicaid expenditures are over budget, driven by higher than budgeted caseloaand higher costs per eligible recipient.

New Hampshire Charter school appropriations are estimated to exceed budgeted appropriations$9.3 million by almost 58 percent ($5.4 million) in FY 2013. Also, due to a dein the implementation of the Managed Care Program, expected savings to date$9 million are not yet recognized.

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island


40/48




South Carolina

South Dakota

Tennessee

Texas In balancing the 2012-13 biennial budget, the Medicaid program wasunderfunded by an estimated $4.3 billion. This will be an immediate issue whethe legislature convenes in January of 2013.

Utah

Vermont Corrections and Judiciary.

Virginia Medicaid and employee health insurance will need additional appropriations.

Washington

West Virginia Medicaid is predicted to be $180 million over budget for FY 2013.

Wisconsin

Wyoming Fire suppression costs due to wildland fires this summer.

Total 22 18 11

Source: NCSL survey of state legislative fiscal offices, fall 2012.


41/48


TABLE 9.SUMMARY OF STATE FISCALSITUATIONS

State/Jurisdiction

Statement

Alabama Collections from growth taxes (income, sales and use, etc.) are improving; however, most other revenue sources arerelatively flat. Most of the growth taxes are earmarked for the Education Trust Fund, while general fund revenuesources, which provides funding for Medicaid, corrections and other general functions of state government, generally

do not grow much.

Alaska For the first time since FY 2005, Alaska may have a deficit in FY 2013. Deficits beyond FY 2014 are projected, andofficials expect to begin using some of the reserves set aside in anticipation of future deficits.

Arizona Currently stable; however, shortfalls in FY 2015 and FY 2016 are possible, depending on the rate of recovery andMedicaid expansion decisions.

Arkansas Based on general revenue collections, the current forecast is to fully fund general revenue allocations provided for inthe Arkansas Revenue Stabilization Act for FY 2013. The allocation of general revenue in the Act is the amountforecasted to be available for distribution to state agencies and the institutions of higher education receiving generalrevenue.

California Stable, with projected operating surpluses in the out-years, assuming there is steady economic growth and restraint inaugmenting current program funding levels.

Colorado Year-to-date, personal income and sales taxes have been strong. However, the impact of the fiscal cliff on theeconomy is unknown. In addition to the tax increases and discretionary spending cuts, Colorado has a number ofaerospace jobs and is home to six military bases.

Connecticut It is still early in the year and officials have not yet produced thorough expenditure estimates, but right now thebudget appears to be out of balance in the range of $300 million. The performance of the economy is the main

worrygrowth is slow and revenues are a concern.

Delaware Revenues have stabilized somewhat, yet the outlook is still cautiously optimistic. In addition, four tax sunsets are setto occur in FY 2014 and FY 2015 with an impact of $34.5 million and $178.5 million, respectively.

District ofColumbia

The District continues to experience revenue stability and expenditure discipline. The District is planning for theimpact of federal government sequestration. The District's Council, Mayor and Chief Financial Officer continue to

monitor happenings on Capitol Hill and are prepared to respond without disruption to any possible shifts in federalspending.

Florida Legislative actions during the 2011 and 2012 sessions to close the projected budget gaps through recurring meanspositively impacted the state's bottom line in subsequent years. In this regard, total estimated expenditures for futureyears were constrained by the amount of recurring expenditure reductions taken in FY 2012 and FY 2013. This hasgreatly improved the Long-Range Financial Outlook's bottom line. Currently, no budget gap is projected for futurefiscal years.

Georgia Stable growth, but slightly lower than originally expected; however, the state is already adjusting for these lessaggressive collections. Population growth and unforeseen shortages that arose since the passage of the budget are theprimary reasons for agency reductions.

Hawaii "Razor's edge. Projected general fund balances and reserves are barely adequate and are likely to be very sensitive toany unanticipated economic or fiscal shocks. Post-employment benefit liabilities and their impact to the

Comprehensive Annual Financial Report continue to be a major concern.

Idaho Continued slow growth. Agriculture is doing very well and keeping afloat the nonfarm economy.

Illinois While revenues have performed at, or even ahead of budgeted levels, the continued backlog of owed bills has notallowed the fiscal pressure to ease.

Indiana No Response


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Iowa Revenues have increased significantly during the first four months of FY 2013 compared to the first four months lastyear and are exceeding revenue predictions. The state has experienced growth in jobs, but not robust growth. There isstill a high level of uncertainty in economic growth. The expiration of the federal tax cuts could have a significant

impact on state revenuemore federal taxes paid means reduced state revenues as federal taxes are deductible in Iowa.Growth rates, while currently very strong, could stabilize at a modest growth level.

Kansas The state economy is showing consistent, but slow growth. The new tax reforms are expected to create a temporary(three year) reduction in revenue, followed by an expected increase in long-term growth.

Kentucky General fund revenues have grown the past two years, but growth is anticipated to be 3 percent or lower over the nexttwo fiscal years.

Louisiana No Response

Maine The states fiscal condition is precarious with little on the horizon that would result in an improvement over recentforecasts and numerous potential downside risks.

Maryland Revenue attainment at the close of FY 2012 was better than expected, as economic activity has improved

(employment, home sales, vehicle sales and personal income). Nominal revenue growth is forecast for FY 2014, whilespending pressures are starting to ease with the decline of Medicaid and temporary cash assistance caseloads.However, risks to the state's budget situation continue to exist. In the short term, how the federal governmentaddresses the upcoming "fiscal cliff" could impact Maryland disproportionately greater than other states, as well as theoverall economy. The state also continues to have a structural general fund deficit in excess of $400 million that mustbe addressed.

Massachusetts FY 2013 has thus far not met expectations for revenue collectionsmaking midyear budget cuts a distinct possibilityat this point. Obviously, this also has a negative effect on the outlook for FY 2014.

Michigan Slow but stable economic growth will yield slow but consistent growth in baseline revenue. However, tax changesenacted in 2011 will reduce net revenue growth in FY 2013 to levels below baseline rates. As a result, general fundrevenue is expected to decline in FY 2013. The tax changes have also added a substantial degree of estimationuncertainty, on top of the uncertainty associated with underlying economic fundamentals, regarding revenue in FY

2013.

Minnesota Revenues have exceeded forecasted amounts since the last state budget forecast was issued in February 2012. Officialshave concerns because current projections of economic growth (as measured by GDP) are lower than the projectionsused in the February forecast. Spending appears to be consistent with forecasted amounts. A general fund deficit of$1.1 billion is projected for the next biennium (FY 2014-FY 2015).

Mississippi FY 2013 general funds are growing over the previous fiscal year at a very slow rate.

Missouri Revenues are starting to bounce back but sales and income tax revenues are slightly below historic norms.

Montana Through October, the state has a general fund cash balance of $486 million. Revenues are projected to continue tohover around 3.8 percent higher than the forecasted amounts. Budgetary pressures facing the 2013 Legislatureinclude wildfire suppression, supplementals for K-12 education, personnel costs, pension liabilities, and infrastructureneeds related to the development of natural resources in eastern Montana. Unknown are the budget priorities of the

newly elected governor.

Nebraska Officials are projecting a shortfall in meeting minimum reserve requirements by the end of the next biennium (endingJune 30, 2015). Revised forecasts have narrowed the projected gap, however, an imbalance of sufficiently substantialmagnitude remains to cause concern on how best to achieve balance.

Nevada The current fiscal situation is stable to positive due to the greater than forecast beginning general fund balance, andactual year-to-date revenue coming in above forecast.

New Hampshire Officials continue to remain cautiously optimistic.


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New Jersey Prior to the occurrence of Hurricane Sandy, the state faced a reduced opening balance, revenue shortfalls andpotential cost overruns in FY 2013, but budgeted a surplus of only $648 million (about 2 percent of appropriations).Robust revenue targets assume 8.4 percent aggregate growth over FY 2012 levels (as recalculated by Office of

Legislative Services based on its understanding of FY 2012 final collections), but revenue growth is underperformingat only 1.9 percent through September. If first quarter revenue results are repeated across the remainder of the fiscalyear, revenues will be at least $1 billion below the levels assumed in the budget. It is unclear how the impact ofHurricane Sandy alters this situation.

New Mexico In FY 2013, the state has "new money" to spend with revenues in FY 2013 exceeding FY 2012 spending. After severalyears of difficult budget challenges, state revenue is rebounding.

New York Stable but guarded, with a potential shock from the effects of the storm that hit New York City and Long Island,which is not reflected in current revenue estimates.

North Carolina Revenues have stabilized and are returning to long-term growth trends.

North Dakota The states economy is expanding rapidly due to oil and gas activity which has resulted in a growing workforce,increasing population, and expanding housing and business developments.

Ohio Expenditures are well below estimate so far this year, so with tax revenues slightly above estimate, the current fiscalsituation gives reason for cautious optimism.

Oklahoma Stable with a rational sense of optimism for continued improvement and stability. At the same time, cautiousmonitoring of economic conditions are a must since, while the states economy appears structurally sound, a relianceon the health of the commodities sector (energy, agriculture, etc.) could shift conditions rapidly.

Oregon Due to declining projected revenues early in the 2011-13 biennium (which runs from July 2011 through June 2013),the state's budget was rebalanced during the February 2012 session to accommodate the lower revenue situation.Since then, revenue forecasts have stabilized, resulting in a cautiously optimistic budget environment. ThroughSeptember 2012, the state has a projected $193 million general fund ending balance, or about 1.4 percent ofbudgeted expenditures.

Pennsylvania Revenues are stable and are gradually improving.Rhode Island The state's position is stabilizing. Human services caseloads are growing slower than previously anticipated and

projected revenues increased slightly in November.

South Carolina Stable,

State Budget Fall 2012 Update

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Transcript of State Budget Fall 2012 Update