October 7, 2015
Budget officers from about half of the states gathered last week in the Washington, D.C. area to share information about their current fiscal situation. The states are in relatively good shape in the sixth year of recovery since the recession with mostly stable growth. Most states ended fiscal 2015 with a surplus, or at least saw revenues meet projections. State finance officials expect continued growth for the most part in fiscal 2016 but are cautious about the future as there is still an open question as to how well the economy will grow.
Some concerns about the economy voiced at the recent gathering included weak sales tax growth and the impact of the latest volatility in the stock market and its effect on income tax revenues. Additionally, officials in energy states continue to monitor revenue collections due to low oil prices. Federal policy decisions including the most recent lack of certainty about keeping the government open and looming discussions about the debt ceiling also continue to be potential concerns for the overall economy. During the round table discussion, states discussed funding needs for transportation as well as tax credits, especially the timing of when the credits are taken and the impact on revenues.
Overall, state budget officials expect continued growth and therefore stability in revenues but will approach the future with caution.