State Government Fiscal Stress and Federal
Assistance

Robert Jay Dilger
Senior Specialist in American National Government
December 3, 2012
Congressional Research Service
7-5700
www.crs.gov
R41773
CRS Report for Congress
Pr
epared for Members and Committees of Congress

State Government Fiscal Stress and Federal Assistance

Summary
No two state budgets are alike. States have different budget cycles, different ways of preparing
revenue estimates and forecasts, different requirements concerning their operating and capital
budgets, different roles for their governors in the budget process, and different policies
concerning the carrying over of operating budget deficits into the next fiscal year.
Although no two state budgets are alike, all 50 states have experienced fiscal stress in recent
years, especially during FY2009 and FY2010. The national economic recession, which officially
lasted from December 2007 to June 2009, led to lower levels of economic activity throughout the
nation and reduced state tax revenues. State tax revenues from all sources, including sales,
personal, and corporate income tax collections, fell from $680.2 billion in FY2008 to $609.8
billion in FY2010, a decline of 10.3%. The decline in state tax revenue, coupled with increased
demand for social services and state-balanced operating budget requirements, created what the
National Association of State Budget Officers (NASBO) characterized as “one of the worst time
periods in state fiscal conditions since the Great Depression.”
States closed nearly $230 billion in state budget shortfalls in FY2009 and FY2010; and $146.3
billion in state shortfalls in FY2011 and FY2012. State fiscal conditions improved during FY2011
and FY2012, and are projected to continue to improve in FY2013. However, states continue to
experience fiscal challenges. For example, although state general fund revenue is projected to
surpass pre-recession levels in FY2013 by about $10 billion (from $680.2 billion in FY2008 to
$690.3 billion in FY2013), total general fund spending is projected to remain below pre-recession
levels in FY2013 (from $687.3 billion in FY2008 to $682.7 billion in FY2013). State budget
officers predict continuing budgetary challenges in virtually all states in FY2013, in part due to
slow state revenue growth, the withdrawal of temporary federal assistance provided through P.L.
111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), the need to replenish
reserves, and increased costs for health care and other social services.
Congressional interest in state budgetary finances has increased in recent years, primarily because
state action to address budget shortfalls, such as increasing taxes, laying off or furloughing state
employees, and postponing or eliminating state infrastructure projects, could have an adverse
effect on the national economic recovery. For example, Federal Reserve Board Chairman
Benjamin Bernanke stated on March 2, 2011, that the fiscal problems of state and local
governments have “had national implications, as their spending cuts and tax increases have been
a headwind on the economic recovery.” Also, if states reduce their service levels there could be
additional pressure for the federal government to provide those services. As funding from ARRA
expires, there could be additional pressure for the federal government to provide additional
federal assistance to states.
This report examines the current status of state fiscal conditions and the role of federal assistance
in state budgets. It begins with a brief overview of state budgeting procedures and then provides
budgetary data comparing state fiscal conditions in FY2008 to FY2011. The data indicate that (1)
states reduced their general fund budgets from FY2008 to FY2011, but, because they received
increased federal funding, increased their total amount of spending; (2) the share of total state
expenditures held by the states’ four operating expenditures budgets (general fund, federal funds,
other state funds, and bonds) shifted from FY2008 to FY2011, with an increased reliance on
federal funds; and (3) states experienced varying levels of fiscal stress from FY2008 to FY2011.
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This report concludes with an assessment of the consequences current levels of state fiscal stress
may have for the 113th Congress.



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Contents
State Budgets ................................................................................................................................... 1
State Budgetary Procedures ............................................................................................................. 4
Current State Operating Expenditures ....................................................................................... 4
The State Capital Budget ........................................................................................................... 5
Trends in State Expenditures ........................................................................................................... 5
Total State Expenditures ............................................................................................................ 8
State General Fund Expenditures ............................................................................................ 10
State Federal Funds Expenditures ........................................................................................... 12
Other State Funds Expenditures .............................................................................................. 14
State Bonds Expenditures ........................................................................................................ 16
State Capital Expenditures ....................................................................................................... 18
Federal Assistance and State Fiscal Stress ..................................................................................... 20
Consequences for State Policymakers ..................................................................................... 21
Consequences for Congress ..................................................................................................... 22
Variations in State Fiscal Stress ..................................................................................................... 23
Consequences for Congress ..................................................................................................... 23
Benchmarks for Measuring Variation in State Fiscal Stress .................................................... 24
Issues with Using State General Fund Expenditures as a Benchmark .............................. 24
Measuring the Relative Size of State Governments .......................................................... 24
Concluding Observations ............................................................................................................... 27

Figures
Figure 1. Total State Expenditures for FY2000-FY2011, by Funding Source ................................. 7

Tables
Table 1. Total State Expenditures (Capital Inclusive), FY2000-FY2011 ........................................ 8
Table 2. Change in Total State Expenditures, FY2008-FY2011 ...................................................... 9
Table 3. Change in State General Fund Expenditures, FY2008-FY2011 ...................................... 11
Table 4. Change in State Federal Funds Expenditures, FY2008-FY2011 ..................................... 13
Table 5. Change in Other State Funds Expenditures, FY2008-FY2011 ........................................ 15
Table 6. Change in State Bonds Fund Expenditures, FY2008-FY2011 ......................................... 17
Table 7. Change in State Capital Fund Expenditures, FY2008-FY2011 ....................................... 19
Table 8. Total Amount of State Federal Assistance and Federal Assistance as a Share of
Total State Expenditures (Capital Inclusive), FY2000-FY2011 ................................................. 21
Table 9. Total State Expenditures, Per Capita FY2011 and Percentage of State GDP
FY2010 ....................................................................................................................................... 25

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Contacts
Author Contact Information........................................................................................................... 28

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State Budgets
No two state budgets are alike.1 For example, 27 states have an annual budget cycle, 21 states
have a biennial budget cycle, and 2 states have an annual budget cycle for some agencies or
purposes and a biennial budget cycle for others.2 Most states (46) begin their fiscal year on July 1,
2 states begin their fiscal year on October 1 (Alabama and Michigan), 1 state begins its fiscal year
on September 1 (Texas), and 1 state begins its fiscal year on April 1 (New York).3
States also have different ways of preparing their revenue estimates and forecasts that project the
amount of revenue that will be available based on current law to support operating costs and
capital outlays in the current and future fiscal years. These revenue estimates are important
because they establish the general parameters for the state’s budget at the outset of the budget
process.4 The state budget office is solely responsible for revenue forecasting in 13 states, a board
or commission is solely responsible in 11 states, and the state revenue office is solely responsible
in 3 states. The remaining states use a combination of agencies or boards to develop their revenue
forecasts.5
All but one state (Vermont) has some form of a balanced operating budget requirement, either in
statute or in their state constitution, but the stringency of these requirements varies, ranging from
having only a requirement that the governor submit a balanced operating budget for the
legislature’s consideration (2 states) to having a prohibition against carrying a deficit forward and
requirements that the governor propose, the legislature pass, and the governor sign a balanced
operating budget (26 states).6 Overall, governors in 44 states must submit a balanced operating
budget for legislative consideration, state legislatures in 41 states must pass a balanced operating

1 The state expenditure data presented in this report are drawn from the National Association of State Budget Officers’
(NASBO) annual State Expenditure Reports. The data are self-reported by the states. In 2010, the Government
Accountability Office (GAO) assessed the reliability of NASBO expenditure data for a report on state and local
government use of funding provided by P.L. 111-5, the American Recovery and Reinvestment Act of 2009. GAO
reviewed existing documentation related to the NASBO data sources and interviewed knowledgeable agency officials
about the data. GAO determined that “the data are sufficiently reliable for the purposes of this report.” See U.S.
Government Accountability Office, Recovery Act: Opportunities to Improve Management and Strengthen
Accountability over States’ and Localities’ Use of Funds
, GAO-10-999, September 20, 2010, p. 205, at
http://www.gao.gov/new.items/d10999.pdf. GAO has also examined the reliability of NASBO’s semi-annual Fiscal
Survey of States reports and found them to be reliable. See U.S. Government Accountability Office, State and Local
Governments: Knowledge of Past Recessions Can Inform Future Federal Assistance
, GAO-11-401, March 31, 2011,
pp. 2, 52, at http://www.gao.gov/new.items/d11401.pdf. The Bureau of the Census also surveys state and local
governments concerning their revenues and expenditures. NASBO data was used in this report because it includes more
recent estimates.
2 National Association of State Budget Officers, Budget Processes in the States, Washington, DC, Summer 2008, p. 5,
at http://nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg%3d&tabid=38.
3 Ibid.
4 Ibid., pp. 3, 20. For further information and analysis of state revenue estimates see Susan K. Urahn and Thomas Gais,
“States’ Revenue Estimating: Cracks in the Crystal Ball,” The Nelson Rockefeller Institute of Government and the Pew
Center on the States, Washington, DC, at http://www.pewcenteronthestates.org/uploadedFiles/
States_Revenue_Estimating_final.pdf.
5 National Association of State Budget Officers, Budget Processes in the States, Washington, DC, Summer 2008, pp. 3,
20, at http://nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg%3d&tabid=38.Ibid.
6 Ibid., p. 40; and National Conference of State Legislatures, “NCSL Fiscal Brief: State Balanced Budget Provisions,”
Washington, DC, October 2010, pp. 4, 5, at http://www.ncsl.org/documents/fiscal/
StateBalancedBudgetProvisions2010.pdf.
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budget, the governor must sign a balanced operating budget in 37 states, and 43 states have a
prohibition against carrying an operating budget deficit forward.7 Also, the extent of the
governor’s authority in the budget process varies among the states. The governor can spend
unanticipated federal funds in 30 states, reduce enacted budgets in 38 states, veto an item within
the appropriations bill in 41 states, veto selected words in 15 states, and use the veto to change the
meaning of words in 4 states.8
Although 43 states have a prohibition against carrying an operating budget deficit forward, all
states incur debt to finance capital projects, typically subject to limits on debt service (31 states),
levels of authorized debt (44 states), or both (29 states).9 State government long-term debt was
$1.098 trillion at the end of FY2010 (39.2% of total state and local government debt), an increase
of 5.8% from FY2009.10
Although no two state budgets are alike, all 50 states experienced heightened levels of fiscal
stress during FY2009 and FY2010.11 The national economic recession, which officially lasted
from December 2007 to June 2009, led to lower levels of economic activity throughout the nation
and reduced state tax revenues.
State tax revenues from all sources, including sales, personal, and corporate income tax
collections, fell from $680.2 billion in FY2008 to $609.8 billion in FY2010, a decline of 10.3%.12
The decline in state tax revenue, coupled with state balanced operating budget requirements,
created what the National Association of State Budget Officers (NASBO) characterized as “one
of the worst time periods in state fiscal conditions since the Great Depression.”13 For example,
even with an additional $120.3 billion in temporary federal assistance provided through P.L. 111-
5, the American Recovery and Reinvestment Act of 2009 (ARRA), in FY2010, states reduced
their general fund expenditures by 5.7% from FY2009 ($660.9 billion) to FY2010 ($623.4
billion), enacted $23.9 billion in increased taxes and fees, and raised an additional $7.5 billion
through other revenue measures.14
States closed nearly $230 billion in state budget shortfalls in FY2009 and FY2010; and $146.3
billion in FY2011 and FY2012.15 State fiscal conditions improved somewhat in FY2011 and

7 National Association of State Budget Officers, Budget Processes in the States, Washington, DC, Summer 2008, pp.
29, 40, at http://nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg%3d&tabid=38.
8 Ibid., pp. 29, 38.
9 Ibid., p. 43.
10 U.S. Census Bureau, State Government Finances Summary: 2010, Government Division Briefs, January 2012, p. 2,
at http://www2.census.gov/govs/state/10statesummaryreport.pdf. For further analysis of state debt issues see CRS
Report R41735, State and Local Government Debt: An Analysis, by Steven Maguire.
11 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Fall 2010, pp. vii, viii,
at http://nasbo.org/LinkClick.aspx?fileticket=C6q1M3kxaEY%3d&tabid=83.
12 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Fall 2011, pp. 4-6, at
http://nasbo.org/LinkClick.aspx?fileticket=y%2fqdEfOcPfs%3d&tabid=38.
13 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Fall 2010, p. vii, at
http://nasbo.org/LinkClick.aspx?fileticket=C6q1M3kxaEY%3d&tabid=83.
14 Ibid., pp. vii, viii; National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Fall
2011, p. 4, at http://nasbo.org/LinkClick.aspx?fileticket=y%2fqdEfOcPfs%3d&tabid=38; and National Association of
State Budget Officers, State Expenditure Report: Fiscal Year 2010, Washington, DC, December 2011, p. 2, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
15 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Spring 2011, p. i,
http://nasbo.org/LinkClick.aspx?fileticket=yNV8Jv3X7Is%3d&tabid=65; and National Association of State Budget
(continued...)
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FY2012, and are projected to continue to improve in FY2013. However, states continue to
experience fiscal challenges. For example, although state general fund revenue is projected to
surpass pre-recession levels in FY2013 by about $10 billion (from $680.2 billion in FY2008 to
$690.3 billion in FY2013), total general fund spending is projected to remain below pre-recession
levels in FY2013 (from $687.3 billion in FY2008 to $682.7 billion in FY2013).16 State budget
officers predict continuing budgetary challenges in virtually all states in FY2013, in part due to
slow state revenue growth, the withdrawal of temporary federal assistance provided through P.L.
111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), the need to replenish
reserves, and increased costs for health care and other social services. In addition, projected costs
for state employee pension and retirement health care obligations and delayed infrastructure
projects are also expected to provide continuing budgetary challenges for states.17
Congressional interest in state budgetary finances has increased in recent years, primarily because
state action to address budget shortfalls, such as increasing taxes, laying off or furloughing state
employees, and postponing or eliminating state infrastructure projects, could have an adverse
effect on the national economic recovery. For example, Federal Reserve Board Chairman
Benjamin Bernanke stated on March 2, 2011, that the fiscal problems of state and local
governments have “had national implications, as their spending cuts and tax increases have been
a headwind on the economic recovery.”18 He also stated, on November 20, 2012, that “state and
local governments have cut about 600,000 jobs on net since the third quarter of 2008 while
reducing real expenditures for infrastructure projects by 20 percent.”19 In addition, as funding
from ARRA expires, there could be additional pressure for the federal government to provide
additional federal assistance to states.
This report examines the current status of state fiscal conditions and the role of federal assistance
in state budgets. It begins with a brief overview of state budgeting procedures and then provides
budgetary data comparing state fiscal conditions in FY2008 to FY2011. As will be discussed, the
data presented in this report indicate that (1) states reduced their general fund budgets from
FY2008 to FY2011, but, because they received increased federal funding, increased their total
amount of spending; (2) the share of total state expenditures held by the states’ four operating

(...continued)
Officers, The Fiscal Survey of States, Washington, DC, Spring 2012, p. vii, at http://www.nasbo.org/publications-data/
fiscal-survey-of-the-states.
16 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Spring 2012, p. vii, at
http://www.nasbo.org/publications-data/fiscal-survey-of-the-states.
17 National Association of State Budget Officers, “Facts You Should Know: State and Local Bankruptcy, Municipal
Bonds, State and Local Pensions,” Washington, DC, 2010, at http://www.nasbo.org/LinkClick.aspx?fileticket=
TPVfxV3%2fn10%3d&tabid=38; Dean Baker, “The Origins and Severity of the Public Pension Crisis,” Center for
Economic and Policy Research, Washington, DC, February 2011, at http://www.cepr.net/documents/publications/
pensions-2011-02.pdf; The Pew Center on the States, “The Trillion Dollar Gap: Underfunded State Retirement Systems
and the Road Ahead,” Washington, DC, February 2010, at http://downloads.pewcenteronthestates.org/
The_Trillion_Dollar_Gap_final.pdf; The Pew Center on the States, “The Widening Gap Update,” Washington, DC,
June 18, 2012, at http://www.pewstates.org/uploadedFiles/PCS_Assets/2012/Pew_Pensions_Update.pdf; and CRS
Report R41736, State and Local Pension Plans and Fiscal Distress: A Legal Overview, by Jennifer Staman.
18 Benjamin S. Bernanke, Chairman, Board of Governors of the Federal Reserve Board, “Challenges for State and
Local Governments,” presentation at the 2011 Annual Awards Dinner of the Citizens Budget Commission, New York,
March 2, 2011, at http://www.federalreserve.gov/newsevents/speech/bernanke20110302a.htm.
19 Benjamin S. Bernanke, Chairman, Board of Governors of the Federal Reserve Board, “The Economic Recovery and
Economic Policy,” presentation at the New York Economic Club, New York, November 20, 2012, at
http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm.
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expenditures budgets (general fund, federal funds, other state funds, and bonds) shifted from
FY2008 to FY2011, with an increased reliance on federal funds; and (3) states experienced
varying levels of fiscal stress from FY2008 to FY2011. This report concludes with an assessment
of the consequences current levels of state fiscal stress may have for the 113th Congress.
State Budgetary Procedures
Unlike the federal government, states budget separately for current operating expenditures and for
capital expenditures. As mentioned previously, virtually all states (except Vermont) have some
form of a balanced operating budget requirement, and most states have restrictions on the amount
of debt that they issue to finance capital projects.20
Current State Operating Expenditures
Most states account for their current operating expenditures through four budgets:
• the state general fund budget refers to expenditures from revenues accruing to
the state from taxes, fees, interest earnings, and other sources which can be used
for the general operation of state government.
• the state federal funds budget refers to expenditures from funds received directly
from the federal government.
• the other state funds budget refers to expenditures from revenue sources that are
restricted by law for particular governmental functions or activities; for example,
a gasoline tax dedicated to a state highway trust fund would appear in other state
funds.
• the state bonds budget refers to expenditures from the sale of bonds, generally for
capital projects.21
Also, 48 states (Kansas and Montana are the exceptions) have a state budget stabilization fund,
budget reserve account, or “rainy day” fund to cover unanticipated revenue shortfalls.22 The
amount of revenue set aside in these funds varies from state-to-state, generally ranging from 2%
to 10% of appropriations.23 In recent years, state end-of-year balances, which include ending
balances and budget stabilization, budget reserve account, and “rainy day” funds, have declined
from 8.6% of total state expenditures in FY2008 to 6.5% in FY2012 ($43.6 billion). Most budget

20 National Association of State Budget Officers, Budget Processes in the States, Washington, DC, Summer 2008, pp.
40, 43, at http://nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg%3d&tabid=38.
21 Ibid., p. 107; and National Association of State Budget Officers, State Expenditure Report: Fiscal Year 2009,
Washington, DC, December 2010, p. 4, at http://www.nasbo.org/LinkClick.aspx?fileticket=w7RqO74llEw%3d&tabid=
79.
22 National Association of State Budget Officers, Budget Processes in the States, Washington, DC, Summer 2008, pp.
67-69, at http://nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg%3d&tabid=38.
23 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Spring 2012, p. 50, at
http://www.nasbo.org/publications-data/fiscal-survey-of-the-states. The procedures used to expend these funds vary
from state-to-state, with some states requiring a majority vote of the state legislature and others requiring a super
majority vote to access the funds. See National Association of State Budget Officers, Budget Processes in the States,
Washington, DC, Summer 2008, p. 50, at http://nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg%3d&tabid=38.
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analysts suggest as an informal rule-of-thumb that states set aside at least 5% of expenditures for
unanticipated budget shortfalls.24 In FY2012, 28 states had set aside less than the recommended
amount. State budget officials project that the amount of revenue set aside in these funds will
increase to 7.8% in FY2013 ($53.2 billion), but note that two states (Alaska and Texas) account
for about 46% of the total which “masks the levels of budgetary reserves across all the states.”25
The State Capital Budget
The state capital budget is associated with the acquisition or construction of major capital
projects, including land, buildings, structures, and major equipment. Minor repairs and routine
maintenance are typically reported as operating expenses. Funds for capital projects traditionally
have come primarily from non-general fund sources. In FY2010, funds for capital projects came
from bonds (37.6%), dedicated fees and surpluses (30.8%), federal funds (26.8% in FY2009), and
state general funds/end-of-year operating surpluses (4.8% in FY2009).26
State capital spending totaled $80.3 billion in FY2008, $84.2 billion in FY2009, $86.1 billion in
FY2010, and an estimated $86.1 billion in FY2011.27 According to NASBO, the increase in state
capital spending in FY2009 and FY2010 was at least partly due to increased federal funding
provided by ARRA and several ARRA bond provisions, such as Build America Bonds, Recovery
Zone Economic Development Bonds, and School Construction Bonds.28 In FY2010,
transportation projects accounted for 57.0% ($49.1 billion) of all state capital expenditures,
followed by higher education projects at 14.3% ($12.3 billion), environmental projects at 5.9%
($5.1 billion), corrections projects at 1.8% ($1.6 billion), housing projects at 1.5% ($1.3 billion)
and other capital projects, such as public school facilities, zoo improvements, health care
infrastructure, and sports facilities, at 19.5% ($16.7 billion).29
Trends in State Expenditures
This section examines trends in state expenditures, in nominal dollars, from FY2008 to FY2011,
starting with total state expenditures (including the states’ capital budgets) and followed by each
of the states’ four operating expenditures budgets (state general fund, federal funds, other state
funds, and bonds). FY2008 is used as the starting point for comparative purposes in most of the

24 National Association of State Budget Officers, The Fiscal Survey of States, Washington, DC, Spring 2012, p. 45, at
http://www.nasbo.org/publications-data/fiscal-survey-of-the-states.
25 Ibid., p. 45.
26 National Association of State Budget Officers, State Expenditure Report: Fiscal Year 2010, Washington, DC,
December 2011, p. 78, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
27 National Association of State Budget Officers, State Expenditure Report: Fiscal Year 2009, Washington, DC,
December 2010, p. 80, at http://www.nasbo.org/LinkClick.aspx?fileticket=w7RqO74llEw%3d&tabid=79; and National
Association of State Budget Officers, State Expenditure Report: Fiscal Year 2010, Washington, DC, December 2011,
p. 78, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
28 For further analysis of Build America Bonds, Recovery Zone Economic Development Bonds, and School
Construction Bonds, see CRS Report R40523, Tax Credit Bonds: Overview and Analysis, by Steven Maguire.
29 National Association of State Budget Officers, State Expenditure Report: Fiscal Year 2010, Washington, DC,
December 2011, p. 79, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
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discussion because FY2008 is used by many in Congress as the baseline for making comparisons
in federal budget debates.30
Three general conclusions can be drawn from the data presented in the following tables. First,
states reduced their general fund budgets from FY2008 to FY2011, but increased their total
amount of spending. Faced with declining own-source revenue, states reduced their general fund
budgets by $51.6 billion from FY2008 to FY2011 (from $687.9 billion in FY2008 to an estimated
$636.3 billion in FY2011). However, because expenditures from the states’ federal funds budgets
increased by $186.6 billion from FY2008 to FY2011 (from $388.2 billion in FY2008 to an
estimated $574.8 billion in FY2011), expenditures from other state funds budgets increased $57.7
billion from FY2008 to FY2011 (from $376.9 billion in FY2008 to $434.6 billion in FY2011) and
expenditures from state bonds budgets increased by $6.7 billion (from $34.8 billion in FY2008 to
$41.5 billion in FY2011), total state expenditures increased by $208.3 billion from FY2008 to
FY2011 (from nearly $1.5 trillion in FY2008 to nearly $1.7 trillion in FY2011). Media reports of
state budget cuts and reports of the need for states to make future budget cuts typically refer to the
states’ general fund budgets or to budget cuts necessary to maintain current service levels, not to
total state expenditures. The possible implications of the projected decrease in state federal
assistance over the next several years, for both Congress and the states, are discussed later in this
report.
Second, as shown in Figure 1, the share of total state expenditures held by the states’ four
operating expenditures budgets shifted from FY2008 to FY2011, with an increased reliance on
federal funds. For example, in FY2008, the states’ general fund budgets accounted for 45.9% of
total state spending, their federal funds budgets accounted for 26.3%, their other state funds
budgets accounted for 25.5%, and their bonds budgets accounted for 2.3%. In FY2011, the states’
general fund budgets accounted for an estimated 37.7% of total state spending, their federal funds
budgets accounted for an estimated 34.1%, their other state funds budgets accounted for an
estimated 25.4%, and their bonds budgets accounted for an estimated 2.3%.31 The possible
implications for Congress, and for the states, of the states’ increased reliance on federal funds are
discussed later in this report.
Third, the data suggest that states experienced varying levels of fiscal stress from FY2008 to
FY2011. For example, if state fiscal stress had been evenly distributed, the change in total state
expenditures and the change in state general fund expenditures from FY2008 to FY2011 would
have been expected to be fairly evenly distributed across states. However, the change in total state
expenditures varied across the states, ranging from a reduction of $3.725 billion in Connecticut to
an increase of $33.077 billion in California. Overall, from FY2008 to FY2011, 5 states reduced
their total expenditures and 45 increased their total expenditures. Also, the change in state general
fund expenditures also varied across the states, ranging from a reduction of $11.5 billion in
California to an increase of $3.7 billion in Alaska. Overall, from FY2008 to FY2011, 11 states
increased their general fund expenditures and 39 states cut their general fund expenditures.
The variation in state fiscal stress experienced from FY2008 to FY2011 is typical of state
responses to past national economic downturns. As the Government Accountability Office (GAO)

30 For example, H.Res. 38, Reducing non-security spending to fiscal year 2008 levels or less, was passed by the House
of Representatives, by a vote of 256-165, on January 25, 2011.
31 National Association of State Budget Officers, State Expenditure Report: Fiscal Year 2010, Washington, DC,
December 2011, p. 5, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
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has reported, “revenue fluctuations during national recessions vary substantially across states ...
due in part to states’ differing tax structures, economic conditions, and industrial bases.”32 Also,
unemployment rates have varied across states during both the most recent and past recessions and
GAO has found that “while economic downturns within states generally occur around the same
time as national recessions, their timing—or entrance into and exit out of the economic
downturn—and duration varies.”33 The implications for Congress of these variations in state
fiscal stress, as well as various ways to measure state fiscal stress, are discussed later in this
report.
Figure 1. Total State Expenditures for FY2000-FY2011, by Funding Source
(% of total state expenditures)
50%
45%
State general fund
40%
35%
Federal funds
30%
25%
Other state funds
20%
15%
10%
5%
State bonds
0%
00
01
002
03
04
005
06
07
008
009
10
11
FY20
FY20
FY2
FY20
FY20
FY2
FY20
FY20
FY2
FY2
FY20
FY20

Source: National Association of State Budget Officers, State Expenditure Report [FYs 2000-2009], Washington,
DC, all p. 2, at http://www.nasbo.org/Publications/StateExpenditureReport/StateExpenditureReportArchives/
tabid/107/Default.aspx; and National Association of State Budget Officers, FY2010 State Expenditure Report,
Washington, DC, December 2011, p. 7, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=
38.

32 U.S. Government Accountability Office, State and Local Governments: Knowledge of Past Recessions Can Inform
Future Federal Fiscal Assistance
, GAO-11-401, March 31, 2010, p. 15, at http://www.gao.gov/new.items/d11401.pdf.
33 Ibid., p. 6.
Congressional Research Service
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State Government Fiscal Stress and Federal Assistance

Note: FY2011 total state expenditures and share from the state general fund, federal funds, other state funds,
and state bonds are estimated from state budget documents.
Total State Expenditures
As shown in Table 1, total state expenditures (capital inclusive) increased every fiscal year from
FY2000 through FY2011, ranging from an increase of $39,054 million in FY2003 to $85,066
million in FY2005. In percentage terms, total state expenditures increased, on average, by 5.4%
from FY2000 to FY2011, ranging from an increase of 3.59% in FY2003 to an increase of 7.48%
in FY2000. In recent years, total state expenditures have increased more slowly than in the past—
3.77% in FY2008, 5.38% in FY2009, 4.04% in FY2010, and an estimated 4.05% in FY2011.
Table 1. Total State Expenditures (Capital Inclusive), FY2000-FY2011
($ in millions)
Change in Total
% Change in Total
Amount of State
Amount of State
Total Amount of
Expenditures from
Expenditures from
FY
State Expenditures
Previous FY
Previous FY
2000 $946,086
$65,834 7.48%
2001 $1,015,813 $69,727 7.37%
2002 $1,088,207 $72,394 7.13%
2003 $1,127,261 $39,054 3.59%
2004 $1,181,330 $54,069 4.80%
2005 $1,266,396 $85,066 7.20%
2006 $1,343,118 $76,722 6.06%
2007 $1,425,028 $81,910 6.10%
2008 $1,478,782 $53,754 3.77%
2009 $1,558,416 $79,634 5.38%
2010 $1,621,370 $62,954 4.04%
2011 est.
$1,687,096
$65,726
4.05%
Source: National Association of State Budget Officers, State Expenditure Report [FYs 2000-2009], Washington,
DC, all p. 2, at http://www.nasbo.org/Publications/StateExpenditureReport/StateExpenditureReportArchives/
tabid/107/Default.aspx; and National Association of State Budget Officers, State Expenditure Report: FY2010,
Washington, DC, December 2011, p. 7, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=
38.
As shown in Table 2, total state expenditures (capital inclusive) increased by more than $208.3
billion from FY2008 to FY2011 (from $1,478,782 million in FY2008 to $1,687,096 million in
FY2011). Five states (Connecticut, Delaware, Nevada, New Jersey, and Vermont) decreased their
total amount of state expenditures and 45 states increased their total amount of state expenditures.
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Table 2. Change in Total State Expenditures, FY2008-FY2011
($ in millions)
Change in Total
Total State
Total State
State
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
Alabama $19,840

$20,843
$1,003
Alaska $11,656

$13,923
$2,267
Arizona $25,247

$29,264
$4,017
Arkansas $16,899

$20,333
$3,434
California $194,276

$227,353
$33,077
Colorado $25,129

$28,462
$3,333
Connecticut $24,270
$20,545 ($3,725)
Delaware $8,621

$8,412
($209)
Florida $64,379

$70,518
$6,139
Georgia $38,494

$39,166
$672
Hawaii $11,160

$11,222
$62
Idaho $5,932

$7,050
$1,118
Illinois $44,566

$56,222
$11,656
Indiana $24,239

$27,042
$2,803
Iowa $16,129

$18,538
$2,409
Kansas $12,689

$14,778
$2,089
Kentucky $22,995

$25,528
$2,533
Louisiana $28,888

$30,174
$1,286
Maine $7,427

$8,171
$744
Maryland $30,408

$34,795
$4,387
Massachusetts $43,807
$51,761 $7,954
Michigan $43,982

$50,020
$6,038
Minnesota $28,446

$32,082
$3,636
Mississippi $15,539

$19,777
$4,238
Missouri $21,432

$24,728
$3,296
Montana $5,357

$6,164
$807
Nebraska $8,711

$9,802
$1,091
Nevada $9,240

$8,549
($691)
New Hampshire
$4,807
$5,435
$628
New Jersey
$48,704
$48,235
($469)
New Mexico
$14,207
$14,829
$622
New York
$116,056
$132,765
$16,709
North Carolina
$41,588
$51,124
$9,536
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State Government Fiscal Stress and Federal Assistance

Change in Total
Total State
Total State
State
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
North Dakota
$3,597
$4,974
$1,377
Ohio $56,763

$60,314
$3,551
Oklahoma $20,730

$22,067
$1,337
Oregon $22,174

$33,455
$11,281
Pennsylvania $58,696
$70,089
$11,393
Rhode Island
$7,118
$8,292
$1,174
South Carolina
$20,787
$25,691
$4,904
South Dakota
$3,217
$3,781
$564
Tennessee $26,033

$30,904
$4,871
Texas $81,097

$94,443
$13,346
Utah $11,323

$13,372
$2,049
Vermont $5,308

$4,827
($481)
Virginia $35,330

$42,470
$7,140
Washington $31,732
$32,430 $698
West Virginia
$18,710
$21,492
$2,782
Wisconsin $36,089

$42,844
$6,755
Wyoming $4,958

$8,041
$3,083
Total
$1,478,782
$1,687,096
$208,314
Source: CRS computations from National Association of State Budget Officers, State Expenditure Report: FY2009,
Washington, DC, p. 6, at http://nasbo.org/LinkClick.aspx?fileticket=%2bPqnI4oZw2I%3d&tabid=79 and National
Association of State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 7, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: Total state expenditures include expenditures from the state’s general fund account, federal funds
account, other state funds, and bonds. FY2011 total state expenditures are estimated from state budget
documents.
State General Fund Expenditures
In contrast to total state expenditures, which increased by $208.3 billion from FY2008 to
FY2011, state general fund expenditures decreased by nearly $42.7 billion from FY2008 ($678.9
billion) to FY2011 ($636.3 billion). As shown in Table 3, from FY2008 to FY2011, 39 states
decreased their state general fund expenditures and 11 states (Alaska, Arkansas, Illinois, Indiana,
Nebraska, North Dakota, Ohio, Virginia, Washington, Wisconsin, and Wyoming) increased their
state general fund expenditures.
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Table 3. Change in State General Fund Expenditures, FY2008-FY2011
($ in millions)
State General
State General
Change in State
Fund
Fund
General Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
Alabama $8,460
$6,507
($1,953)
Alaska $5,090
$8,878
$3,788

Arizona $10,368
$8,676
($1,692)
Arkansas $4,274
$4,442
$168

California $102,986
$91,480
($11,506)
Colorado $7,908
$6,984
($924)
Connecticut $16,627 $11,969
($4,658)
Delaware $3,422
$3,271
($151)
Florida $27,513
$24,046
($3,467)
Georgia $17,934
$15,954
($1,980)
Hawaii $5,407
$4,969
($438)
Idaho $2,799
$2,388
($411)
Illinois $22,140
$22,902
$762

Indiana $12,880
$13,037
$157

Iowa $5,867
$5,348
($519)
Kansas $6,102
$5,727
($375)

Kentucky $9,334
$8,787
($547)
Louisiana $10,372
$7,951
($2,421)
Maine $3,084
$2,858
($226)
Maryland $14,488
$13,262
($1,226)
Massachusetts $28,934 $28,468 ($466)
Michigan $9,822
$8,386
($1,436)
Minnesota $17,600
$16,478
($1,122)
Mississippi $4,842
$4,344
($498)
Missouri $8,084
$7,616
($468)
Montana $1,901
$1,701
($200)
Nebraska $3,247
$3,322
$75

Nevada $4,031
$3,401
($630)
New Hampshire
$1,515
$1,322
($193)
New Jersey
$33,112
$29,322
($3,790)
New Mexico
$6,027
$5,203
($824)
New York
$53,385
$53,313
($72)
North Carolina
$20,376
$18,503
($1,873)
Congressional Research Service
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State Government Fiscal Stress and Federal Assistance

State General
State General
Change in State
Fund
Fund
General Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
North Dakota
$1,204
$1,585
$381
Ohio $25,722
$27,649
$1,927

Oklahoma $6,793
$6,475
($318)
Oregon $6,601
$6,107
($494)
Pennsylvania $26,969 $25,142
($1,827)
Rhode Island
$3,405
$2,974
($431)
South Carolina
$7,149
$5,080
($2,069)
South Dakota
$1,176
$1,148
($28)
Tennessee $11,570
$11,227
($343)
Texas $41,184
$40,541
($643)
Utah $5,784
$4,710
($1,074)
Vermont $1,225
$822
($403)
Virginia $15,099
$16,435
$1,336

Washington $14,616 $14,825 $209

West Virginia
$3,824
$3,793
($31)
Wisconsin $13,527
$13,565 $38

Wyoming $3,132
$3,364
$232

Total $678,911
$636,257
($42,654)
Source: CRS computations from National Association of State Budget Officers, State Expenditure Report: FY2009,
Washington, DC, p. 6, at http://nasbo.org/LinkClick.aspx?fileticket=%2bPqnI4oZw2I%3d&tabid=79 and National
Association of State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 7, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: FY2011 state general fund expenditures are estimated from state budget documents.
State Federal Funds Expenditures
As mentioned previously, most of the increase in total state expenditures from FY2008 to FY2011
came from the states’ federal funds expenditures budgets. States spent $388.2 billion in federal
assistance in FY2008, $463.0 billion in FY2009, $552.7 billion in FY2010, and an estimated
$574.8 billion in FY2011.
As shown in Table 4, state federal funds expenditures increased nearly $186.6 billion from
FY2008 to FY2011. One state (Louisiana) decreased its federal funds expenditures and 49 states
increased their federal funds expenditures.
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Table 4. Change in State Federal Funds Expenditures, FY2008-FY2011
($ in millions)
State Federal
State Federal
Change in State
Funds
Fund
Federal Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
Alabama $6,291
$9,067
$2,776

Alaska $2,314
$3,174
$860

Arizona $7,820
$10,499
$2,679

Arkansas $4,806
$7,026
$2,220

California $56,211
$91,459
$35,248

Colorado $4,739
$8,813
$4,074

Connecticut $2,117 $2,520 $403

Delaware $1,113
$1,848
$735

Florida $18,754
$24,999
$6,245

Georgia $10,268
$14,217
$3,949

Hawaii $1,760
$2,554
$794

Idaho $2,005
$3,014
$1,009

Illinois $11,073
$16,185
$5,112

Indiana $7,818
$10,596
$2,778

Iowa $4,565
$6,088
$1,523

Kansas $3,522
$3,865
$343

Kentucky $6,720
$9,763
$3,043

Louisiana $12,883
$12,406
($477)
Maine $2,182
$3,000
$818

Maryland $6,561
$10,621
$4,060

Massachusetts $2,525 $3,739 $1,214

Michigan $12,660
$22,415
$9,755

Minnesota $6,264
$9,468
$3,204

Mississippi $6,434
$9,578
$3,144

Missouri $5,632
$10,294
$4,662

Montana $1,646
$2,380
$734

Nebraska $2,411
$3,220
$809

Nevada $1,780
$2,642
$862

New Hampshire
$1,498
$1,938
$440
New Jersey
$8,851
$13,518
$4,667
New Mexico
$4,506
$5,716
$1,210
New York
$34,680
$44,707
$10,027
North Carolina
$10,914
$17,605
$6,691
Congressional Research Service
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State Government Fiscal Stress and Federal Assistance

State Federal
State Federal
Change in State
Funds
Fund
Federal Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
North Dakota
$1,241
$1,801
$560
Ohio $9,655
$14,431
$4,776

Oklahoma $9,030
$10,048
$1,018

Oregon $4,625
$9,334
$4,709

Pennsylvania $18,037 $29,977
$11,940

Rhode Island
$1,939
$3,085
$1,146
South Carolina
$6,654
$12,844
$6,190
South Dakota
$1,182
$1,671
$489
Tennessee $9,343
$13,930
$4,587

Texas $25,023
$35,901
$10,878

Utah $2,503
$3,954
$1,451

Vermont $1,312
$1,864
$552

Virginia $6,342
$9,832
$3,490

Washington $6,678 $8,543
$1,865

West Virginia
$3,287
$4,638
$1,351
Wisconsin $7,534
$12,236
$4,702

Wyoming $476
$1,737
$1,261

Total
$388,184
$574,760
$186,576
Source: CRS computations from National Association of State Budget Officers, State Expenditure Report: FY2009,
Washington, DC, p. 6, at http://nasbo.org/LinkClick.aspx?fileticket=%2bPqnI4oZw2I%3d&tabid=79 and National
Association of State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 7, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: FY2011 state federal fund expenditures are estimated from state budget documents.
Other State Funds Expenditures
States increased spending from their other state funds expenditures budgets from FY2008 to
FY2011. States spent $376.9 billion from their respective other state funds expenditure budgets in
FY2008, $400.1 billion in FY2009, $411.7 billion in FY2010, and an estimated $434.6 billion in
FY2011.
As shown in Table 5, other state funds expenditures increased $57.7 billion from FY2008 to
FY2011, with 12 states decreasing their other state funds expenditures and 38 states increasing
their other state funds expenditures.
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Table 5. Change in Other State Funds Expenditures, FY2008-FY2011
($ in millions)
Change in Other
Other State Funds Other State Funds
State Funds
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
Alabama $4,537
$4,910
$373

Alaska $4,226
$1,643
($2,583)
Arizona $6,405
$9,654
$3,249

Arkansas $7,756
$8,782
$1,026

California $26,674
$31,219
$4,545

Colorado $12,482
$12,665 $183

Connecticut $3,494
$3,675 $181

Delaware $3,811
$3,090
($721)
Florida $14,916
$20,096
$5,180

Georgia $8,773
$8,326
($447)
Hawaii $3,376
$3,117
($259)
Idaho $1,097
$1,621
$524

Illinois $11,047
$15,296
$4,249

Indiana $3,380
$3,309
($71)
Iowa $5,668
$6,534
$866

Kansas $2,787
$4,824
$2,037

Kentucky $6,941
$6,978 $37

Louisiana $5,342
$9,237
$3,895

Maine $2,053
$2,191
$138

Maryland $8,520
$9,830
$1,310

Massachusetts $10,928 $17,719 $6,791

Michigan $21,081
$19,018
($2,063)
Minnesota $3,891
$5,289
$1,398

Mississippi $4,029
$5,589
$1,560

Missouri $7,165
$6,371
($794)
Montana $1,810
$2,083
$273

Nebraska $3,053
$3,260
$207

Nevada 3,028
$2,284
($744)
New Hampshire
$1,680
$2,042
$362
New Jersey
$5,233
$3,694
($1,539)
New Mexico
$3,091
$3,910
$819
New York
$26,122
$31,163
$5,041
North Carolina
$10,098
$14,543
$4,445
Congressional Research Service
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State Government Fiscal Stress and Federal Assistance

Change in Other
Other State Funds Other State Funds
State Funds
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
North Dakota
$1,125
$1,567
$442
Ohio $20,633
$17,217
($3,416)
Oklahoma $4,803
$5,267 $464

Oregon $10,763
$17,507
$6,744

Pennsylvania $12,952
$14,409 $1,457

Rhode Island
$1,589
$2,121
$532
South Carolina
$6,866
$7,767
$901
South Dakota
$842
$912
$70
Tennessee $4,969
$5,554 $585

Texas $12,634
$16,742
$4,108

Utah $3,033
$4,662
$1,629

Vermont $2,734
$2,055
($679)
Virginia $13,040
$14,839
$1,799

Washington $8,617
$7,037
($1,580)
West Virginia
$11,422
$12,998
$1,576
Wisconsin $15,028
$17,043
$2,015

Wyoming $1,350
$2,940
$1,590

Total Change
$376,894
$434,599
$57,705
Source: CRS computations from National Association of State Budget Officers, State Expenditure Report: FY2009,
Washington, DC, p. 6, at http://nasbo.org/LinkClick.aspx?fileticket=%2bPqnI4oZw2I%3d&tabid=79 and National
Association of State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 7, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: FY2011 state other state fund expenditures are estimated from state budget documents.
State Bonds Expenditures
In FY2008, states spent $34.8 billion from their respective state bonds fund expenditure budgets.
That amount increased to $35.9 billion in FY2009, $37.9 billion in FY2010, and an estimated
$41.5 billion in FY2011. As shown in Table 6, eight states (Colorado, Kentucky, Montana,
Nebraska, New Mexico, South Carolina, Wisconsin, and Wyoming) had no state bonds fund
expenditures in FY2011. The remaining 42 states collectively increased their state bond fund
expenditures by almost $6.7 billion from FY2008 to FY2011, with 18 states decreasing their state
bonds fund expenditures, 24 states increasing their state bonds fund expenditures, and the
remaining 8 states reporting no change in their state bond fund expenditures.
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Table 6. Change in State Bonds Fund Expenditures, FY2008-FY2011
($ in millions)
Change in State
State Bonds Fund
State Bonds Fund
Bonds Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
Alabama $552

$359
($193)
Alaska
$26
$228
$202
Arizona $654

$435
($219)
Arkansas
$63
$83
$20
California
$8,405
$13,195
$4,790
Colorado
$0
$0
$0
Connecticut
$2,032
$2,381
$349
Delaware $275

$203
($72)
Florida $3,196

$1,377
($1,819)
Georgia $1,519

$669
($850)
Hawaii $617

$582
($35)
Idaho $31

$27
($4)
Illinois
$306
$1,839
$1,533
Indiana $161

$100
($61)
Iowa
$29
$568
$539
Kansas
$278
$362
$84
Kentucky
$0
$0
$0
Louisiana
$291
$580
$289
Maine
$108
$122
$14
Maryland
$839
$1,082
$243
Massachusetts
$1,420
$1,835
$415
Michigan $419

$201
($218)
Minnesota
$691
$847
$156
Mississippi $234
$266 $32

Missouri $551

$447
($104)
Montana
$0
$0
$0
Nebraska
$0
$0
$0
Nevada 401
$222
($179)
New Hampshire
$114
$133
$19
New Jersey
$1,508
$1,701
$193
New Mexico
$583
$0
($583)
New York
$1,869
$3,582
$1,713
North Carolina
$200
$473
$273
Congressional Research Service
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State Government Fiscal Stress and Federal Assistance

Change in State
State Bonds Fund
State Bonds Fund
Bonds Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
North Dakota
$27
$21
($6)
Ohio
$753
$1,017
$264
Oklahoma
$104
$277
$173
Oregon
$185
$507
$322
Pennsylvania $738
$561 ($177)
Rhode Island
$185
$112
($73)
South Carolina
$118
$0
($118)
South Dakota
$17
$50
$33
Tennessee
$151
$193
$42
Texas $2,256

$1,259
($997)
Utah
$3
$46
$43
Vermont
$37
$86
$49
Virginia
$849
$1,364
$515
Washington
$1,821
$2,025
$204
West Virginia
$177
$63
($114)
Wisconsin
$0
$0
$0
Wyoming
$0
$0
$0
Total Change
$34,793
$41,480
$6,687
Source: CRS computations from National Association of State Budget Officers, State Expenditure Report: FY2009,
Washington, DC, p. 6, at http://nasbo.org/LinkClick.aspx?fileticket=%2bPqnI4oZw2I%3d&tabid=79 and National
Association of State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 7, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: FY2011 state bonds fund expenditures are estimated from state budget documents.
State Capital Expenditures
The total state expenditures amounts presented in Table 2 included state capital expenditures. As
mentioned previously, state capital spending totaled $80.3 billion in FY2008, $84.2 billion in
FY2009, $86.1 billion in FY2010, and an estimated $86.1 billion in FY2011.34 As shown in Table
7
, five states (Hawaii, Montana, New Mexico, South Carolina, and Wisconsin) reported that they
did not make any state capital expenditures in FY2011. The remaining 45 states collectively
increased their state capital fund expenditures by more than $5.7 billion from FY2008 to FY2011,
with 25 states decreasing their state capital fund expenditures, 23 states increasing their state

34 National Association of State Budget Officers, State Expenditure Report: Fiscal Year 2009, Washington, DC,
December 2010, p. 80, at http://www.nasbo.org/LinkClick.aspx?fileticket=w7RqO74llEw%3d&tabid=79; and National
Association of State Budget Officers, State Expenditure Report: Fiscal Year 2010, Washington, DC, December 2011,
p. 78, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
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capital fund expenditures, and the remaining 2 states reporting that they did not change their state
capital fund expenditures.
Table 7. Change in State Capital Fund Expenditures, FY2008-FY2011
($ in millions)
Change in State
State Capital Fund
State Capital Fund
Capital Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
Alabama
$1,256
$1,291
$35
Alaska $2,606

$2,345
($261)
Arizona
$1,234
$1,252
$18
Arkansas
$107
$120
$13
California
$5,210
$8,332
$3,122
Colorado $1,798
$1,174 ($624)
Connecticut
$2,032
$2,381
$349
Delaware $652
$544 ($108)
Florida $12,671

$9,608
($3,063)
Georgia $3,229

$1,916
($1,313)
Hawai $1,047
$0
($1,047)
Idaho
$479
$657
$178
Illinois
$2,378
$4,571
$2,193
Indiana $477

$386
($91)
Iowa
$598
$954
$356
Kansas
$782
$1,180
$398
Kentucky $875
$667 ($208)
Louisiana
$1,710
$2,384
$674
Maine
$235
$363
$128
Maryland $2,980
$1,576
($1,404)
Massachusetts
$1,985
$2,510
$525
Michigan
$1,832
$2,327
$495
Minnesota
$1,503
$2040
$537
Mississippi $1,384
$1,226 ($158)
Missouri $223
$165 ($58)
Montana
$0
$0
$0
Nebraska $851
$809 ($42)
Nevada 1,240 $984
($256)
New Hampshire
$300
$287
($13)
New Jersey
$4,896
$4,695
($201)
New Mexico
$866
$0
($866)
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Change in State
State Capital Fund
State Capital Fund
Capital Fund
Expenditures,
Expenditures,
Expenditures,
State
FY2008
FY2011
FY2008 to FY2011
New York
$6,131
$7,845
$1,714
North Carolina
$0
$484
$484
North Dakota
$403
$565
$162
Ohio
$3,004
$3,623
$619
Oklahoma
$1,572
$2,578
$1,006
Oregon
$310
$674
$364
Pennsylvania $738
$561 ($177)
Rhode Island
$429
$318
($111)
South Carolina
$436
$0
($436)
South Dakota
$74
$100
$26
Tennessee $1,609
$1,516 ($93)
Texas
$148
$3,307
$3,159
Utah $1,735

$1,323
($412)
Vermont
$225
$344
$119
Virginia
$1,192
$1,248
$56
Washington $3,576
$3,321
($255)
West Virginia
$1,091
$1,280
$189
Wisconsin
$0
$0
$0
Wyoming $239
$225 ($14)
Total Change
$80,347
$86,056
$5,709
Source: CRS computations from National Association of State Budget Officers, State Expenditure Report: FY2009,
Washington, DC, p. 6, at http://nasbo.org/LinkClick.aspx?fileticket=%2bPqnI4oZw2I%3d&tabid=79 and National
Association of State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 80,
at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: FY2011 state capital fund expenditures are estimated from state budget documents.
Federal Assistance and State Fiscal Stress
As the data in the preceding tables indicate, from FY2008 to FY2011, states became more reliant
on federal assistance. For example, as mentioned previously, the states’ federal funds
expenditures increased nearly $186.6 billion from FY2008 to FY2011, compared to an increase of
$57.7 billion from the states’ other state funds budgets, an increase of $6.7 billion from the states’
bonds budgets, and a decrease of nearly $42.7 billion from the states’ general fund budgets.
Also, as shown in Table 8, the total amount of state federal assistance has increased each fiscal
year since FY2000, reaching nearly $574.8 billion in FY2011, more than one-third (34.1%) of
total state expenditures. State budget officials anticipate that this upward trend in state federal
assistance will end over the next several years as ARRA-related funding is exhausted and federal
policymakers scrutinize the federal budget in an effort to address the federal budget deficit.
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President Obama’s FY2012 budget request supports this view, projecting a decline in federal
grant-in-aid funding for state and local governments combined from $625.2 billion in FY2011 to
$584.3 billion in FY2012 and $567.5 billion in FY2013.35
Table 8. Total Amount of State Federal Assistance and Federal Assistance as a Share
of Total State Expenditures (Capital Inclusive), FY2000-FY2011
($ in millions)
Total Amount of State
% Share of Total State
FY
Federal Assistance
Expenditures
2000 $241,317 26.0%
2001 $260,567 25.8%
2002 $295,752 26.9%
2003 $325,102 28.7%
2004 $343,561 29.5%
2005 $365,787 28.9%
2006 $368,668 27.8%
2007 $379,271 26.5%
2008 $388,184 26.3%
2009 $462,980 29.7%
2010
$552,655
34.1%
2011 est.
$574,760
34.1%
Source: National Association of State Budget Officers, State Expenditure Report [FYs 2000-2009], Washington,
DC, all pp. 4, 8, at http://www.nasbo.org/Publications/StateExpenditureReport/StateExpenditureReportArchives/
tabid/107/Default.aspx; and National Association of State Budget Officers, State Expenditure Report: FY2010,
Washington, DC, December 2011, p. 7, at http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=
38.
Consequences for State Policymakers
The states’ increased reliance on federal assistance has consequences for both state and federal
policymakers. For example, in the past, state political leaders have generally welcomed increased
levels of federal assistance while, at the same time, requesting that states be provided maximum
feasible flexibility in the use of the grant funds. For example, the National Governors Association
(NGA) adopted a permanent policy statement on state-federal relations in 1993, which has been
subsequently reaffirmed on several occasions. NGA recommends, among other actions, that the
federal government avoid preemption of state laws and policies, preserve state standards, not
interfere with state revenue systems, avoid unfunded federal mandates, and provide maximum
state flexibility in the use of the federal funds without specific set-asides.36

35 U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2012, Historical
Tables
, Washington, DC, 2010, p. 251, at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/
assets/hist.pdf.
36 National Governors Association, “Policy Statement: Permanent Policy. Principles for State-Federal Relations,”
Washington, DC, at http://www.nga.org/cms/render/live/en/sites/NGA/home/federal-relations/nga-policy-positions/
(continued...)
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With the notable exception of a few governors who objected to federal conditions attached to
ARRA-funded, optional unemployment insurance modernization incentive payments and a few
states which refused federal funding related to the implementation of health care reform under
P.L. 111-148, the Patient Protection and Affordable Care Act, state policymakers have generally
welcomed the recent increase in state federal assistance as a means to help them cope with
reductions in state revenues. It is possible, however, that this increased reliance on state federal
assistance might also further limit the states’ ability to determine their own policy choices. For
example, the need to comply with federal conditions attached to the increased level of federal
funds may limit the states’ ability to design programs in a way that they believe best meets their
needs, which could lead to the federal government substituting its policy preferences for the
state’s policy preferences. Also, given the current relatively low rate of growth for state tax
revenue, the states’ increased reliance on federal assistance could limit the states’ ability to
finance non-federal programs because many federal grants, including Medicaid, have mandatory
state matching requirements.
It could also be argued that the states’ increased reliance on federal assistance could induce a
moral hazard issue by encouraging states to expect similar increases in federal assistance during
future economic slowdowns. The concern is that by providing states additional federal assistance
the states’ “incentives to properly manage risks,” by taking such actions as fully funding their
“rainy day” reserve funds or making other policy choices to restrain state budget growth during
good economic times, could be weakened.37
Consequences for Congress
The states’ increased reliance on federal assistance could make it more difficult for Congress to
make quick and deep reductions in state federal assistance because such actions could lead state
governments to take actions, such as laying off public employees, cutting back on state service
levels, or increasing state taxes and fees, that could have an adverse effect on the national
economic recovery. It could also be argued that many states would have to take such actions
because they presently lack the own-source revenue necessary to absorb a significant reduction in
state federal assistance.
The counter-argument is that the consequences of reducing state federal assistance to pre-
recession levels may force some state governments to make difficult policy choices, but, given
the federal government’s budget deficit and debt, federal policymakers face similar difficult
choices. In addition, it could be argued that the states’ increased reliance on federal assistance has
created conditions in which state service and benefits levels have become artificially “elevated”
to levels that, in the absence of additional federal assistance, would not have been enacted in the
first place. As will be discussed in the next section, this last argument involves value judgments
concerning the appropriate size and scope of state government.

(...continued)
page-ec-policies/col2-content/main-content-list/title_principles-for-state-federal-relations.html.
37 U.S. Government Accountability Office, State and Local Governments: Knowledge of Past Recessions Can Inform
Future Federal Fiscal Assistance
, GAO-11-401, March 31, 2010, p. 30, at http://www.gao.gov/new.items/d11401.pdf.
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Variations in State Fiscal Stress
As mentioned previously, although state economic downturns generally occur around the same
time as national recessions, the states’ responses to national recessions “vary in magnitude,
duration, and timing and do not necessarily coincide with dates identified for national
recessions.”38 The variation in the states’ economic responses to the most recent recession helps
to explain the variation found in the states’ change in state general fund expenditures from
FY2008 to FY2011, with some states increasing their state general fund expenditures and others
cutting them.
Consequences for Congress
GAO has recommended that Congress take variations in state fiscal stress into consideration
when deciding whether, when, and how to provide federal assistance to state and local
governments during and immediately after national economic downturns.39 Specifically, GAO
found that the federal government has provided fiscal assistance to state and local governments in
response to three of the six national recessions since 1974, and, after examining the efficacy of
those efforts in ameliorating state fiscal stress and enhancing national economic growth,
recommended that Congress consider the following when developing a policy strategy to address
state and local government fiscal stress during and following national recessions:
• Timing/triggering mechanisms—federal policy strategies specifically intended to
stabilize state and local governments’ budgets may have to be timed differently
than those designed to stimulate the national economy, because state budget
difficulties often persist beyond the end of a recession.
• Targeting—if federal fiscal assistance to state and local governments is targeted
based on the magnitude of the recession’s effect on each state’s economy, this
approach can facilitate economic recovery and moderate fiscal distress at the
state and local level.
• Temporary—while a federal fiscal stimulus strategy can increase economic
growth in the short run, such efforts can contribute to the federal budget deficit if
allowed to run too long after entering a period of strong recovery.
• Consistency—the design of federal fiscal assistance occurs in tandem with
consideration of the impact these strategies can have on other federal policy
objectives. For example, a standby federal fiscal assistance policy could induce
moral hazard by encouraging state or local governments to expect similar federal
action in future crises, thereby weakening their incentives to properly manage
risks. Another consideration is the policy objective of maintaining accountability
while promoting flexibility in state spending. Past studies have shown that
unrestricted federal funds are fungible and can be substituted for state funds, and
the uses of such funds can be difficult or impossible to track.40

38 Ibid., p. 3.
39 Ibid., p. 28.
40 Ibid., p. 30.
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GAO provided Congress a list of recommended economic indicators that could be used to serve
as triggering mechanisms to either time or target state federal assistance to respond to the effects
of a particular recession, including, among others, employment and unemployment data, hourly
earnings, personal income, wages and salaries, and weekly hours worked.41 GAO excluded
indicators of state fiscal stress, such as declines in state tax receipts or state budget gaps, “because
they are dependent on state government’s policy choices and because state definitions and
measurement techniques vary for calculations such as budget gaps.”42
Benchmarks for Measuring Variation in State Fiscal Stress
Although GAO chose not to measure variations in state fiscal assistance, one measure of state
fiscal stress that is often used is the difference between the state’s current and previous year’s
general fund budget expenditures. It could be argued that if the state is facing a need to reduce its
general fund expenditures from the previous year’s level, either in real (inflation adjusted) dollars
or in current (nominal) dollars, it is experiencing fiscal stress. Generally speaking, after taking
into account factors such as state population differences or differences in the size of the states’
general fund budgets, as the amount needed to reduce the state’s general fund expenditures
increases (typically referred to as the state’s budget gap), the state’s fiscal stress also increases.
Issues with Using State General Fund Expenditures as a Benchmark
The difference between each state’s current and previous year general fund budget expenditures is
relatively easy to compute and is often used as an indication of state fiscal stress by various
organizations. However, as GAO has noted, there is little guidance available to determine if the
state’s general fund expenditures for the current, or for the previous year, are “appropriate”
baselines to use for measuring state fiscal stress. For example, depending on one’s personal
values concerning the appropriate size and scope of state government, it could be argued that state
expenditures are too high or too low. Also, as mentioned previously, in the absence of an
agreement concerning which baselines to use in measuring state fiscal stress, it could be argued
that the states’ current fiscal stress has as much to do with their previous budgetary decisions (or
non-decisions) as with the national economic slowdown’s adverse effect on state revenue growth.
This is an important issue for federal policymakers because if state fiscal stress is viewed as being
largely a result of state policy decisions, it is likely that there will be less support for federal
action to ease that fiscal stress than would be the case otherwise.
Measuring the Relative Size of State Governments
The data presented in Table 9 are provided to help inform congressional debate concerning the
extent to which the states’ varying levels of fiscal stress are due to changing economic conditions
or to state policy choices. The data provide a framework for measuring differences in the size of
state governments relative to each other, rather than to a preconceived “ideal” state budget that
would, by necessity, be based largely on personal value judgments concerning the appropriate
size and scope of state government. This information may prove useful as a reference when
debating the role of state policy choice in state fiscal stress.

41 Ibid., p. 32.
42 Ibid.
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As shown in the table, total state expenditures, both per capita and as a percentage of state GDP,
vary.43
Table 9. Total State Expenditures, Per Capita FY2011 and Percentage of State
GDP FY2010
Total State
Total State
Total State
Expenditures
Expenditures
State GDP
Expenditures
FY2011
FY2011,
FY2010
FY2010,
State
($ in millions)
Per Capita
($ in millions)
% of State GDP
Alabama $20,843
$4,340
$172,567
12.08%
Alaska $13,923
$19,297
$49,120
28.34%
Arizona $29,264
$4,563
$253,609
11.54%
Arkansas $20,333
$6,949
$102,566
19.82%
California $227,353
$6,088
$1,901,088
11.96%
Colorado $28,462
$5,642
$257,641
11.05%
Connecticut $20,545
$5,736
$237,261 8.66%
Delaware $8,412
$9,338
$62,280
13.51%
Florida $70,518
$3,731
$747,735
9.43%
Georgia $39,166
$4,026
$403,070
9.72%
Hawaii $11,222
$8,210
$66,760
16.81%
Idaho $7,050
$4,480
$55,435
12.72%
Illinois $56,222
$4,370
$651,518
8.63%
Indiana $27,042
$4,159
$275,676
9.81%
Iowa $18,538
$6,070
$142,698
12.99%
Kansas $14,778
$5,160
$127,170
11.62%
Kentucky $25,528
$5,868
$163,269
15.64%
Louisiana $30,174
$6,626
$218,853
13.79%
Maine $8,171
$6,129
$51,643
15.82%
Maryland $34,795
$6,010
$295,304
11.78%
Massachusetts $51,761
$7,891 $378,729 13.67%
Michigan $50,020
$5,047
$384,171
13.02%
Minnesota $32,082
$6,036
$270,039
11.88%

43 Another factor that could be used to compare total state expenditures is the extent to which the state relies on local
governments to provide services. It could be argued that some states look “bigger” than others because they carry
greater responsibility for providing services than their local governments when compared to other states. Unfortunately,
data on local government finance are typically delayed for at least two years. For example, at the time of this writing,
the latest available data at the Bureau of the Census for both state and local government expenditures are for FY2009.
Those data indicate that in FY2009 the state share of total state and local government expenditures varied among the
states, ranging from 42.5% in Florida to 77.1% in Hawaii. The states’ average share of state and local government
expenditures was 57.5%, with 27 states below the national average and 23 states above the national average. CRS
calculations from U.S. Bureau of the Census, “State and Local Government Finance: 2009 State and Local
Government,” Washington, DC, at http://www.census.gov/govs/estimate/.
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Total State
Total State
Total State
Expenditures
Expenditures
State GDP
Expenditures
FY2011
FY2011,
FY2010
FY2010,
State
($ in millions)
Per Capita
($ in millions)
% of State GDP
Mississippi $19,777
$6,640
$97,461
20.29%
Missouri $24,728
$4,113
$244,016
10.13%
Montana $6,164
$6,199
$36,067
17.09%
Nebraska $9,802
$5,351
$89,786
10.92%
Nevada $8,549
$3,155
$125,650
6.80%
New Hampshire
$5,435
$4,113
$60,283
9.02%
New Jersey
$48,235
$5,477
$487,335
9.90%
New Mexico
$14,829
$7,173
$79,678
18.61%
New York
$132,765
$6,836
$1,159,540
11.45%
North Carolina
$51,124
$5,344
$424,935
12.03%
North Dakota
$4,974
$7,359
$34,685
14.34%
Ohio $60,314
$5,214
$477,699
12.63%
Oklahoma $22,067
$5,861
$147,543
14.96%
Oregon $33,455
$8,693
$174,151
19.21%
Pennsylvania $70,089
$5,504
$569,679
12.30%
Rhode Island
$8,292
$7,858
$49,234
16.84%
South Carolina
$25,691
$5,530
$164,445
15.62%
South Dakota
$3,781
$4,612
$39,893
9.48%
Tennessee $30,904
$4,847
$254,806
12.13%
Texas $94,443
$3,738
$1,207,494
7.82%
Utah $13,372
$4,826
$114,538
11.67%
Vermont $4,827
$7,658
$25,620
18.84%
Virginia $42,470
$5,284
$423,860
10.02%
Washington $32,430
$4,802
$340,460 9.53%
West Virginia
$21,492
$11,556
$64,642
33.25%
Wisconsin $42,844
$7,519
$248,265
17.26%
Wyoming $8,041
$14,149
$38,527
20.87%
Total
$1,687,096
NA
$14,448,494
NA
National Average
$33,742
$5,457
$288,970
11.68%
Source: CRS computations from U.S. Bureau of the Census,” Apportionment Population and Number of
Representatives, by State: 2010 Census,” December 21, 2010, at http://www.thegreenpapers.com/Census10/;
U.S. Department of Commerce, Bureau of Economic Analysis, ”Gross Domestic Product By State,” Washington,
DC, September 29, 2011, at http://www.bea.gov/regional/gsp/default.cfm#download; and National Association of
State Budget Officers, State Expenditure Report: FY2010, Washington, DC, December 2011, p. 7, at
http://nasbo.org/LinkClick.aspx?fileticket=5VMZ59stp1w%3d&tabid=38.
Notes: FY2011 total state expenditures are estimated from state budget documents. The national median for
total state expenditures in FY2011, per capita, was $5,642. The national median for total state expenditures in
FY2010, as a percentage of state GDP, was 12.13%.
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As shown in Table 9, in FY2011, total state expenditures ranged from $3,781 million in South
Dakota to $227,353 million in California. The national average for total state expenditures was
$33,742 million, with 35 states having total state expenditures below the national average and 15
states having total state expenditures above the national average.
In FY2011, total state expenditures on a per capita basis varied from $3,155 in Nevada to $19,297
in Alaska. The national average for total state expenditures on a per capita basis was $4,340, with
21 states having total state expenditures on a per capita below the national average and 29 states
having total state expenditures on a per capita basis above the national average.
In FY2010 (the latest data available), state gross domestic product and total state expenditures as
a percentage of state gross domestic product varied from state-to-state. State gross domestic
product ranged from $25,620 million in Vermont to $1,901,088 million in California. The
national average for state gross domestic product was $288,970 million, with 35 states having
state gross domestic product below the national average and 15 states having state gross domestic
product above the national average.
In FY2010, total state expenditures as a percentage of state gross domestic product ranged from
6.80% in Nevada to 33.25% in West Virginia. The national average for total state expenditures as
a percentage of state gross domestic product was 11.68%, with 19 states having total state
expenditures as a percentage of state gross domestic product below the national average and 31
states having total state expenditures as a percentage of state gross domestic product above the
national average.
Concluding Observations
State policymakers throughout the nation will face at least four significant fiscal challenges in the
coming years. First, state budget officials expect relatively low levels of tax revenue growth. If
these state revenue estimates prove to be accurate, unless there is growth in other state revenue
sources, many states are going to face funding gaps in their general fund budgets for several more
years which, given state balanced operating budget requirements, would need to be addressed.44
Second, ARRA funding, the primary source of state revenue relief over the past two years, is
expiring. Third, state federal assistance outside of ARRA is expected to decline, and federal
grants to state and local governments are included in federal domestic discretionary spending, an
area of the federal budget expected to receive much attention over the next several years by
federal policymakers as they seek ways to address the federal deficit and debt. Fourth, projected
state costs for Medicaid, state employee pension and retirement health care obligations, and
delayed infrastructure projects are also expected to provide continuing budgetary challenges for
states.
Given these fiscal challenges, it is likely that states will continue to look to the federal
government for financial assistance. Federal assistance could be provided in several ways, for
example (1) granting of waivers of federal grant program requirements, (2) temporary or

44 For further information and analysis of state revenue estimates see Susan K. Urahn and Thomas Gais, “States’
Revenue Estimating: Cracks in the Crystal Ball,” The Nelson Rockefeller Institute of Government and the Pew Center
on the States, Washington, DC, at http://www.pewcenteronthestates.org/uploadedFiles/
States_Revenue_Estimating_final.pdf.
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permanent relief from federal grant matching requirements, (3) relaxation or elimination of state
program-related maintenance of effort requirements that are often attached to federal grant
programs, and (4) providing additional direct federal assistance.
GAO has recommended that Congress consider variations in state fiscal stress when deciding
whether, when, and how to provide federal assistance to state and local governments during and
immediately after national economic downturns. As mentioned previously, GAO also provided a
list of economic indicators, such as employment and unemployment data, hourly earnings,
personal income, wages and salaries, and weekly hours worked, that could be used as triggers for
providing states federal assistance.45 GAO excluded indicators of state fiscal stress, such as
declines in state tax receipts or state budget gaps, “because they are dependent on state
government’s policy choices and because state definitions and measurement techniques vary for
calculations such as budget gaps.”46
Disagreement over the appropriate size of state government has always been an issue in
discussions of the role of federal assistance in state budgeting. The data presented in Table 9
suggest that state governments, both in terms of total state expenditures on a per capita basis and
as a percentage of state GDP, vary in size. Some argue against providing additional federal
assistance to states because, in their view, the states’ current level of fiscal stress, especially in
states with a relatively high level of state expenditures, could have been ameliorated if the states
had been more prudent with their fiscal choices prior to the recent recession. Others suggest that
the federal government’s fiscal challenges have reached a point at which providing additional
federal assistance to states is out of the question. Still others assert that if the federal government
does not continue to provide the states additional assistance, then the states will take actions that
will have an adverse effect on the national economic recovery. Some also contend that the recent
increase in federal assistance to states is approaching levels that may lead to a fundamental
change in the nature of American federalism. They are concerned that the need to match federal
grant money and the increased reliance on federal assistance to provide services could displace
state priorities with federal priorities. The data and analysis in this report provide a framework for
assisting Congress as it considers these various viewpoints concerning whether, when, and how to
provide federal assistance to state and local governments during times of state fiscal stress.

Author Contact Information

Robert Jay Dilger

Senior Specialist in American National Government
rdilger@crs.loc.gov, 7-3110



45 Ibid., p. 32.
46 Ibid.
Congressional Research Service
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