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State Fiscal Conditions

On February 16, Scott Pattison, Executive Director of the National Association of State Budget Officers (NASBO), spoke to the Tax Economists Forum, a Washington, DC based group of public finance economists, about the current condition of state finances and the outlook for the future. To briefly summarize Mr. Pattison’s presentation: the current fiscal condition of state governments has improved somewhat when compared to last year, states, as a whole, face significant challenges in both the near-term and the long-term. States will face slow revenue growth – revenue levels may not return to 2008 levels until 2013 or 2014. However, MEDICAID enrollment is expected to grow by 6.1 percent this fiscal year. States will have a difficult time if economic growth does not accelerate as their combined balances are expected to be 5.6% of their expenditures at the end of this fiscal year. If Texas and Alaska are excluded, that figure drops to 2.8%. In addition, the Federal flexible funding ends in June of this year.

A link to Mr. Pattison’s presentation is provided here (pdf).