Twice a year, the National Governors Association (NGA) and the National Association of State Budget Offices (NASBO) publish the “Fiscal Survey of States.” The current report is based upon a survey conducted by NASBO from January through May 2008. According to the executive summary, “this edition of The Fiscal Survey of States reflects actual fiscal 2007, estimated fiscal 2008, and recommended fiscal 2009.” In short, a growing number of states are facing a tough budget environment.
According to NGA Executive Director Raymond C. Scheppach, “Fallout from the housing market decline, coupled with dramatic increases in the price of energy, is having a negative impact on state revenues, particularly corporate and sales tax revenues. Governors know that meeting increasing expenditure expectations with limited revenues will present challenges even after the national economy rebounds.”
The trickle down effect from the housing market and energy price increases have impacted nearly everything from health care and veteran programs to education funding, at the primary and secondary levels as well as higher education. Thirteen states were forced to make budget cuts after the fiscal 2008 budgets were passed, of those thirteen, three made cuts to education programs. In addition to budget cuts, the survey stated that governments experienced the lowest spending increase in 31 years, a stark contrast to the preceding several years.
According to a CNN Money report, an analyst with KeyBanc Capital Marks notes, “growth in state spending would be slow during in fiscal 2009 versus 2008. This slower spending could negatively affect construction and engineering companies involved in areas such as civil engineering projects, health care and education.”
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