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ASPA Webinar: Challenges and Opportunities in State & Local Budgeting

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Slides for "Challenges and Opportunities in State & Local Budgeting" webainar, presented December 9, 2014, by Association for Budgeting & Financial Management and American Society for Public Administration

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ASPA Webinar: Challenges and Opportunities in State & Local Budgeting

  1. 1. Challenges & Opportunities in  State & Local Budgeting Presented By Kenneth Hunter, MPA, City of Rocky Mount, NC Scott Pattison, Executive Director, NASBO December 9, 2014
  2. 2. Overview How We Budget State Trends Local Trends Q&A
  3. 3. Different Governments, Different Budgeting Processes
  4. 4. Structural Challenges Where’s Washington? Capacities/Expectations/Polarization Entitlements Obligations
  5. 5. When Budgeting Matters Cover Obligations First Prioritize Needs & Objectives Realistic Projections Assess Long‐Term Impact
  6. 6. Scott Pattison Executive Director National Association of State Budget Officers 444 North Capitol Street, NW, Suite 642 • Washington, DC 20001 • (202) 624-5382 • www.nasbo.org ASPA December 9, 2014
  7. 7. State Fiscal Overview  Budgets show continued slow improvement and stability  Fiscal 2015 marks the fifth consecutive year of revenue and spending increases  Positive signs: shrinking budget gaps, minimal mid-year budget cuts, net tax cuts and stable rainy day fund balances  Concerns: below average budget growth, limited projected revenue gains, cost increases, unmet demand in areas such as infrastructure
  8. 8. -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 (PercentageChange) Annual Percentage Change in General Fund Expenditures *Average 37-year historical average annual rate of growth is 5.5 percent.
  9. 9. Additional budget dollars target K-12 Education and Medicaid
  10. 10. GF Spending Still Below Pre-Recession Peak Adjusted for Inflation Source: NASBO Fall 2014 Fiscal Survey of States; Fiscal 2015 numbers are enacted *Aggregate spending levels would need to be at $771 billion to remain equivalent with real 2008 spending levels. 12/19/2014www.nasbo.org 5
  11. 11. GF Revenue Also Below Pre-Recession Peak Adjusted for Inflation Source: NASBO Fall 2014 Fiscal Survey of States; Fiscal 2015 numbers are enacted *Aggregate revenue levels would need to be $763 billon to remain equivalent with real 2008 revenue levels. 12/19/2014www.nasbo.org 6
  12. 12. States Enact $2.3B in Net Tax and Fee Cuts for FY15 Fiscal Year 12/19/2014www.nasbo.org 7
  13. 13. Budget Cuts Made After the Budget Passed ($ millions) Source: NASBO Fall 2014 Fiscal Survey *Fiscal 2015 midyear cuts are ongoing Minimal Midyear Budget Cuts So Far in Fiscal 2015 12/19/2014www.nasbo.org 9
  14. 14. Spending by Funding Source (Percentage) Source: NASBO State Expenditure Report 12/19/2014www.nasbo.org 10
  15. 15. Shifting of Funding Sources Total State Expenditures by Funding Source (2008) Total State Expenditures by Funding Source (2014) Source: NASBO State Expenditure Report 12/19/2014www.nasbo.org 11
  16. 16. Total State Expenditures by Function, Estimated Fiscal 2014 Source: NASBO State Expenditure Report 12/19/2014www.nasbo.org 12
  17. 17. General Fund Expenditures by Function, Estimated Fiscal 2014 Source: NASBO State Expenditure Report 12/19/2014www.nasbo.org 13
  18. 18. Revenue Sources in the General Fund (Percentage) Source: NASBO State Expenditure Report 14 12/19/2014www.nasbo.org
  19. 19. State Fiscal Outlook 15  Trends are positive with 43 states increasing general fund spending in fiscal 2015  Revenue collections are projected to grow at a faster rate compared to fiscal 2014.  However, additional revenue is limited and spending demands continue to rise, particularly in critical areas of the budget like health care and higher education  Fiscal stability likely to continue, but unmet spending needs may persist along with slow budget growth
  20. 20. www.nasbo.org Thank You Scott Pattison (202) 624-8804 spattison@nasbo.org
  21. 21. Where Are Local Governments  Headed? Overview of 2014 Fiscal Condition of Cities
  22. 22. Highlights Improving (current resources &  reserves) Revenues growing, not recovered Emphasis on wages, public safety,  infrastructure
  23. 23. Highlights Fee increases over tax increases Challenged by benefits, infrastructure  needs Revenues could stagnate,  expenditures continue growing
  24. 24. 2014 City Fiscal Condition Analysis Available at http://bit.ly/12mOQus
  25. 25. Business Trends Housing volatility remains amongst  positive signs (prices, starts, SFH v.  MFH) Manufacturing up 18 straight months Services growing 58 straight months
  26. 26. Business Trends Employment growth remains tied to  skilled position, knowledge centers  (progressive cities) Small business sentiment improved  significantly following negative trend  all year (Hmmm…what changed?)
  27. 27. Thank You! Kenneth Hunter Kenneth.Hunter@nclgba.org Scott Pattison spattison@nasbo.org www.ABFM.org

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