Alabama’s governor highlighted fiscal 2021 budget provisions in her State of the State address, including a $1 billion bond issue for school capital improvements, a 3 percent pay raise for teachers, expanding the state’s prekindergarten program, a 2 percent pay raise for state employees and adding 50 additional state troopers. Revenue estimates project record revenues in the Education Trust Fund in fiscal 2021 of $7.5 billion, an increase of $411 million over the current year while the General Fund is projected to have nearly $2.6 billion available, an increase of $360 million over the current year. A legislative committee studying prison issues completed its work and will deliver recommendations to the governor addressing educational opportunities and other programming for inmates.
Alaska’s governor delivered his second State of the State address and called for creation of a state lottery and said he would introduce legislation allowing Alaskans to receive land instead of cash for their Permanent Fund Dividend. The governor released a $265 million supplemental budget request for fiscal 2020, with $120 million allocated to Medicaid and $110 million allocated for firefighting costs.
Arizona’s governor released a $12.3 billion budget for fiscal 2021 that increases spending by more than $600 million over the current year, with about half of new investments allocated to K-12 education and $25 million set aside in the state’s rainy day fund; the budget also funds pay increases for correctional officers and $24 million for election security and cybersecurity efforts. The governor proposed closing an aging prison and transferring inmates to other state or county facilities, but many counties indicated their jails would not be able to accommodate the additional inmates. Legislators from both parties introduced bills focused on groundwater supplies in rural parts of the state.
Arkansas’ net available general revenue in January totaled $594.6 million, an increase of $40.6 million over the prior year and $1.1 million over the forecast with year to date revenues running $94.2 million above the forecast. Voters will decide in November if the state should make permanent a half-cent sales tax dedicated to transportation, which was first enacted in 2013 and is set to expire in 2023. The Secretary of Finance and Administration testified in front of the U.S. House Budget Committee at a hearing on federal investments in states.
California’s governor presented a $222 billion budget proposal for fiscal year 2021 that includes a vaping tax, funds a new Wildfire Forecast and Threat Intelligence Integration Center, spends $84 billion on K-12 education and community colleges, creates a new Department of Early Childhood Development, spends $21 billion for higher education and invests $12.5 billion over five years for resiliency measures. The budget also allocates an additional $500 million for the state’s housing tax credit program to help fund affordable housing. The Trump administration rejected the state’s plan to collect a health care tax on managed care organizations, which could cost the state nearly $2 billion a year.
Colorado’s governor and legislature continue to examine various tax reform proposals, including the governor’s recommendation to cut income taxes and eliminate certain tax breaks. The legislature also continues to work on a bipartisan deal to increase transportation revenue and is examining teacher pay raises. A recent study found that Colorado is the least dependent state on Census-guided funding.
Connecticut’s governor’s proposed fiscal 2021 budget adjustments reflect a 0.6 percent increase over the fiscal 2021 budget approved last year with most of the new spending for rising state employee health costs, larger-than-anticipated state pension contributions, Medicaid, and a potential shortfall at the University of Connecticut Health Center. The state is projecting an operating shortfall of $58.8 million for the current fiscal year, up $35.8 million from last month’s forecast mainly due to revised revenue estimates. The estimated rainy-day fund is expected to reach almost $2.8 billion by the beginning of fiscal 2021, or 13.8 percent of net general fund appropriations.
Delaware’s governor proposed a $4.9 billion general fund budget for fiscal 2021 that includes the second year of a three-year $75 million commitment for the Opportunity Fund for additional resources to low-income students and English learners and $50 million to establish a Clean Water Trust account. The Department of Elections is receiving $3 million out of the $425 million in election security grants included in the fiscal 2020 federal funding bill.
Florida legislators included a pay raise for state employees in their fiscal 2021 budgets, with the Senate including a 3 percent raise and the House including an increase of $1,800 for employees who make less than $50,000. The governor called for increasing base teacher salaries to $47,500 in his State of the State address. The state would lose $70.4 million in disproportionate share hospital funding if Congress does not take action on a reduction currently scheduled to occur on May 23.
Georgia’s governor released a $28.1 billion fiscal 2021 budget proposal that includes an increase of $257.2 million to cover enrollment growth in schools, $89.6 million for increased enrollment in Medicaid and funding to support a pay raise for state employees making less than $40,000. The budget also includes about $350 million to fund a $2,000 pay raise for teachers, which follows a $3,000 raise approved in the last budget. State tax collections increased 4.5 percent in January, an increase of $133 million over the prior year. The governor signed a bill imposing state sales taxes on online purchases made through marketplace facilitators, which is projected to raise hundreds of millions of dollars a year in revenue.
Hawaii’s governor spoke about proposals to help address the high cost of living during his State of the State address. The legislature is considering a teacher pay hike proposal. State lawmakers recently announced a plan to expand mental health treatment. The state’s largest pension fund currently faces a $14 billion shortfall.
Idaho’s governor may propose a five-year teacher pay plan to boost teacher salaries. Lawmakers voted to create an interim committee to study math, science, and English standards for K-12. The state’s total Medicaid spending is expected to pass $3 billion, with more than $2 billion of that coming from the federal government; a state official also said that Medicaid expansion is going well and that 62,000 people had signed up since January 1. A House committee rejected two bills to repeal grocery taxes with one bill still pending.
Illinois’ governor’s State of the State speech focused on the need for ethics reform, bringing prosperity and opportunity to all communities in Illinois, creating a fairer criminal justice system including phasing out cash bail, adopting new clean energy legislation, and finding bipartisan solutions to reduce local property taxes. The state recently collected $240 million from a tax amnesty program. The state has also seen strong sales of recreational marijuana since its legalization. The governor announced the release of $50 million for broadband expansion.
Indiana’s governor called for using $250 million from the surplus in the next budget to prepay the state’s obligation to the teacher’s retirement fund during his State of the State speech allowing $50 million a year to be redirected to teacher pay; the governor also highlighted a number of other issues including the creation of the state’s first adoption unit within the Department of Child Services. Gamblers have made $436 million in bets during the first four month of legalized sports gaming, with much of it coming from mobile devices. The governor recently signed legislation to spend $291 million in unexpected tax revenue on college construction projects.
Iowa’s governor proposed an $8.1 billion fiscal 2021 budget that increases general fund spending by 4.4 percent; the recommendation also includes additional spending for K-12, Medicaid, workforce and rural development initiatives, disaster aid, child care, and other priorities. In her Condition of the State address, the governor proposed tax reform that would cut income and property taxes while raising sales taxes. The House and the Senate have approved differing K-12 spending measures.
Kansas’ governor called for the expansion of Medicaid, greater infrastructure investments, aligning the state’s education and workforce development systems, criminal justice reform, and tax reform during her State of the State speech. Her fiscal 2021 budget proposal includes funding for Medicaid expansion, highway projects, early debt payments, additional prison beds, s Highway Patrol helicopters, and state employee pay raises. The legislature is examining legalized sports betting. Some in the legislature are calling for tax cuts with revenues rising above projections.
Kentucky’s governor released a two-year spending plan that includes a $2,000 pay raise for public school teachers, a 1 percent raise each year for state employees, salary increases for state troopers and other sworn personnel and full funding for the state’s Medicaid program. The budget assumes passage of a 10-cent increase on tobacco products and approval of a sports betting bill and does not include any cuts to the general fund. The administration petitioned the Supreme Court to set “clear constitutional rules” around processes to collect bail money from the accused and review pretrial release practices.
Louisiana’s governor proposed a $32 billion state budget for fiscal 2021 that includes increases for early childhood and higher education, statewide adjustments for mandated costs, and juvenile justice. The budget increases spending by nearly $285 million with $65 million allocated to the K-12 financing formula for public schools, $25 million for early learning programs for children from birth to 3 years old, and $35 million for public colleges. The state Supreme Court ruled 4-3 that an online marketplace facilitator is not required to collect and remit Jefferson Parish sales tax on behalf of its third-party sellers.
Maine’s governor proposed a fiscal 2021 supplemental budget that adds $126.6 million, or 1.6 percent in net appropriations, for a total of $8.138 billion. The governor proposes a $37 million increase in public education funding, $15 million for broadband expansion, an additional $20 million for the rainy day fund, and fully funding proposed increases for public colleges and universities. The University of Maine system’s Board of Trustees voted to try to become the first in the nation to have its seven campuses accredited together instead of separately.
Maryland’s governor released a $47.9 billion budget proposal for fiscal 2021 that focuses on priorities such as crime, education, transportation and the environment and includes full funding for education, $2.6 million for 25 staff in the Attorney General’s office and full funding for Chesapeake Bay restoration and land preservation programs. Legislators filed a bill that would overhaul the state’s public schools and is estimated to cost $4 billion annually after being phased-in over ten years. Lawmakers began debating a proposal to tax targeted online advertising, which could generate as much as $250 million annually but may lead to a lengthy court challenge.
Massachusetts’ governor released a proposed $44.6 billion budget proposal for fiscal 2021, an increase of 2.3 percent over fiscal 2020 projected spending, excluding transfers to the Medical Assistance Trust Fund. The budget fully funds the first year of the Student Opportunity Act, adding a total of $355 million in new spending. The state’s consensus revenue forecast for fiscal 2021 at $31.2 billion, represents a 2.8 percent growth in state tax revenue over adjusted fiscal 2020 projected revenue. Preliminary revenue collections for January were 6.2 percent more than the actual collections the prior year and $35 million or 1.2 percent less than benchmark.
Michigan’s governor, in her State of the State speech, called for borrowing $3.5 billion for roads, expanding overtime eligibility, added investments in early education, and providing tuition-free skills training and degree programs for adults; the governor also spoke about the need to do something on healthcare including enshrining protections for people with pre-existing conditions, creating a task force focusing on prescription drug transparency and lowering costs, extending health coverage for low-income women that have babies, and eliminating disparities in care for new moms. In her fiscal 2021 budget proposal, the governor recommended the largest increase in K-12 spending in 20 years, increased funding for initiatives to improve maternal and infant outcomes, and $64 million for three new environmental initiatives.
Minnesota’s governor released details on a four-part, $2 billion plan for public construction projects. The state also continues to examine possible changes in transportation funding. The current legislative session is expected to focus on issues surrounding education, healthcare, jobs, infrastructure spending, emergency insulin access, and voter privacy. Discussions are also expected to take place on how best to spend a $1.3 billion, one-time surplus.
Mississippi’s governor released a budget proposal for fiscal 2021 that recommends a $1,500 salary increase for teachers and $100 million for workforce training but does not include increased funding for the Department of Corrections. The U.S. Department of Justice announced an investigation into state prisons following a number of deaths and riots. The state lottery earned $7.6 million for the state in its first month; the lottery would generate more than $90 million annually for roads and bridges if the current pace continues.
Missouri’s governor, in his State of the State speech, said that his initiatives this legislative session will be focused on building stronger communities, improving education and workforce development, revitalizing infrastructure, and making government more accountable. The governor’s budget proposal for fiscal 2021 calls for increased funding for education, workforce development, transportation, as well as the creation of a new cash operating expense fund. The state Senate is currently examining a proposed gas tax hike. Two new reports said that expanding Medicaid would be a net positive for the state’s budget.
Montana’s governor said that he wants to move aggressively on several issues in his final year including decreasing the gender pay gap and bringing more good paying jobs to the state. The governor also said that a legislative audit of the Medicaid program shouldn’t impact upcoming infrastructure projects. Lawmakers are examining possible revisions to the state tax system. Two different groups are pushing ballot initiatives to legalize recreational marijuana in the state. The U.S. Supreme Court recently agreed to take up a Montana case regarding school choice.
Nebraska’s governor’s State of the State speech focused on property tax relief, additional flood aid, workforce development initiatives, tax relief for military retirees, and spending restraint in local governments. In addition, his budget proposal for the second year of the biennium budget called for improving the state’s rainy day fund. The legislature is examining a series of bills to expand gaming including the possibility of sports betting.
Nevada’s governor’s priorities include criminal justice reform, finding a permanent solution to education funding, ensuring that students arrive at school ready to learn, and tackling climate change. Lawmakers are beginning to examine new ways to pay for transportation spending. A record $9.8 million in marijuana tax revenue was collected by the state in October. A teacher’s union proposal to increase the sales tax is expected to bring in an additional $1 billion a year.
New Hampshire’s governor announced that he intends to file a waiver with the federal government that could help stabilize the individual health insurance market and lower premiums by as much as 15 percent next year. The state is set to receive $7.7 million in federal funding from the U.S. Department of Housing and Urban Development, as part of its Housing Continuums of Care Grant. The state Senate approved a bill that will continue to provide schools with Medicaid funds for children with disabilities.
New Jersey will become the first state in the nation to require builders to consider the impact of climate change if they want their projects approved. The state become the first state to guarantee severance pay for mass layoffs. The governor signed a bill into law that will allow people incarcerated in prisons to receive state aid to learn behind bars. Revenue collections through December totaled $13.887 billion, up $986.4 million, or 7.6 percent, above the same six month period last year.
New Mexico’s House passed a $7.6 billion budget proposal for fiscal 2021 that includes a 7.5 percent spending increase from the current year. The legislature continues to work on a number of issues including state health insurance exchange changes, pension reform, tuition-free college proposals, school finance, legalizing recreational marijuana, and importing Canadian drugs. The governor recently signed legislation to devote an additional $8 million to census participation.
New York’s governor proposed a fiscal 2021 operating budget of $178 billion in all funds and $105.8 billion in state operating funds, an increase of 1.9 percent. The proposed budget increases school aid by $826 million, a 3 percent increase, and will reconvene a Medicaid Redesign Team to address a Medicaid shortfall. The governor is proposing to allocate more funds to poorer public districts and to charter schools.
North Carolina state revenues were about $290 million above forecast at the end of December with $224 million attributed to higher individual income tax collections. A commission on public school funding released its final report that recommends improving teacher pay, expanding prekindergarten and scholarships for student teachers, and changing the state’s A-F grading system. A state judge overseeing school funding litigation signed an order accepting conclusions of a consultant that found insufficient progress and focused on eight areas of improvement and scenarios that could cost $8 billion over eight years.
North Dakota’s governor, in his State of the State address, discussed opportunities for workforce and community development as well as his plan to reinvest some of the earnings from the voter-approved oil tax savings account to grow the funds principal. Total revenues are approximately 7.6 percent above forecast for the current two-year budget cycle. Officials said the state’s oil output may peak within the next five years.
Ohio’s governor released a preliminary report on recommendations to reform the state’s children services system. A conference committee will be held to discuss differences between the House and Senate’s bills to change the state’s private school voucher system. Officials are working to fix eligibility and backlog problems in the state’s Medicaid system. The governor is examining agency spending requests for the upcoming capital budget bill.
Oklahoma’s governor proposed a fiscal 2021 budget of nearly $8.1 billion that includes funding for $25.3 million in gubernatorial priorities while allocating an additional $100 million into state reserve accounts. The budget proposes flat funding for several agencies, while allocating $6 million to reduce the waiting list for developmental disability services by 10 percent and increasing the state’s Quick Action Closing Fund by $3 million. The governor announced his plan to expand Medicaid by using the federal government’s newly proposed Health Adult Opportunity demonstration with the state submitting a Medicaid state plan amendment in the coming weeks.
Oregon is expected to have approximately $1 billion in ending balances available, with half expected to be set aside to help prepare the state for a future recession and the rest likely directed to other spending priorities. The legislature is expected to once again consider a cap-and-trade bill during the legislative session. A recent audit said the state’s child welfare tracking system is adequate but needs work.
Pennsylvania’s governor released his proposed fiscal 2021 total operating budget of $89.2 billion with general funds of $36.1 billion, an increase of $1.5 billion, or 4.2 percent over the prior year. The governor is proposing a new $204 million scholarship program for students at the 14 state-owned universities that would ensure a debt-free education for at least 25,000 students. General fund revenue through January totals $18.7 billion, which is $158.5 million, or 0.9 percent, above estimate.
Rhode Island’s governor released her proposed fiscal 2021 budget of $10.2 billion that addresses a projected operating deficit of approximately $200 million, invests $14.1 million to continue and expand a workforce training program, and would make the state's free tuition program at the community college permanent. The governor is proposing three bond measures of $269 million for voters to consider in the November elections.
South Carolina’s governor proposed a fiscal 2021 budget that includes $100 million for improvements at state prisons, $213 million for a $3,000 pay raise for teachers and $38 million to state law enforcement agencies to recruit new employees and raises salaries. The budget also includes $425 million in rebates and tax cuts, funded by an additional $1.8 billion in revenue available in the upcoming fiscal year. In his State of the State address, the governor noted the state’s record-low unemployment rate and growing population.
South Dakota’s governor discussed the state’s attractiveness to new businesses, including its tax structure, state credit rating, balanced state budget and lack of red tape during her State of the State speech. Lawmakers are expected to examine a number of issues during their short session including the fiscal status of the budget, expanding mental health resources to help rural areas, legalizing hemp, and possible pay raises for teachers and state employees. Some teachers recently protested the amount of state education support. Several small towns have asked for additional state support for road repairs.
Tennessee’s governor released a $40.8 billion budget proposal for fiscal 2021 that includes $20.1 billion from state appropriations, $14.6 billion from federal funds and $6.1 billion from other sources. The budget includes a $250 million investment in a newly created K-12 Mental Health Trust Fund and $117 million for teacher pay raises. An audit of state prisons found the state correction agency did not provide adequate oversight to ensure safety of inmates and the public.
Texas’ turnover at the Department of Family and Protective Services fell by 4.5 percent in 2019 and expects to fall again in 2020 following a salary increase of $9,000 for caseworkers and the addition of 40 caseworkers. Lawmakers plan to hold a hearing to examine increased leasing costs by the Teacher Retirement System after a move to a new office. As one of seven states without a personal income tax, a local newspaper examined the sources of revenue in the Texas budget.
Utah’s legislature reversed a year of work on tax reform, with the two chambers voting nearly unanimously to repeal legislation. Revenue to the general and education funds totaled $3.6 billion through December representing a year-over-year growth rate of 6.4 percent, above the November consensus revenue target of 4.3 percent. The House passed a measure that would instruct the state to seek a federal waiver to allow inmates to become eligible for Medicaid coverage 30 days before their release date to allow them to continue mental health treatment they may be receiving in prison.
Vermont’s governor released his proposed fiscal 2021 $6.3 billion budget, a 2 percent increase over the current year, that does not include any new taxes or fees. The governor is proposing a universal after-school program for K-12 students that would be implemented over the next five years. Economic forecasters project an increase to projected tax revenue of $44 million over the next two years.
Virginia lawmakers debated different bills increasing the state’s minimum wage, with the House version gradually increasing it to $15 an hour statewide while the Senate version includes a gradual increase to $11.50 followed by regional minimum wages. Teachers rallied at the state capitol encouraging legislators to fund over $1 billion in new education expenses. Legislators are considering a transportation package that includes an eight-cent increase to the gas tax over two years, a 2.1 percent regional gas tax in certain areas and a fuel efficient vehicle fee.
Washington’s legislative session plans to adjust the state budget and tackle several policy issues, including how to address homelessness in the state. Major general fund-state revenue collections for the December 10, 2019 to January 10, 2020 period came in $85 million or 4.8 percent above the November forecast, with cumulative collections $168.7 million or 3.7 percent higher than forecasted.
West Virginia’s governor proposed a $4.58 billion budget for fiscal 2021 that utilizes $108.64 million in one-time funding to offset a drop in revenue collections. A new report found West Virginia relies on federal money directed by the census more than any other state, with federal funding representing more than 16 percent of personal income. The governor reduced revenue estimates for fiscal 2020 by $16.5 million; year-to-date revenue collection is running about $2 million below estimates.
Wisconsin’s governor, in his State of the State speech, called for creating a nonpartisan redistricting commission, passing bills to support the dairy industry, and creating a student debt task force. The state is expected to take in approximately $818 million more in revenue than expected through the end of fiscal 2021 which has led some in the legislature to call for tax cuts, while the governor has proposed additional spending for education and lowering property taxes. Legislators are currently considering a series of criminal justice bills. Regents are expecting to include a tuition increase proposal in the next biennium budget.
Wyoming’s governor submitted 17 letters to the Legislature’s Joint Appropriations Committee that reflect some of his budget priorities and requests for fiscal 2021-2022. State lawmakers on the Joint Appropriations Committee approved a bill authorizing the state to begin setting up a billing system through which Medicaid funds could be used for K-12 special education services.