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Flywheel Focus: FY 2022 State Budgets

Flywheel Focus: FY 2022 State Budgets

Flywheel Focus: FY 2022 State Budgets

Today marks the first day of the 2022 fiscal year in most states, which means the majority of legislatures have been scrambling over the last few weeks to finalize spending amounts and get them to governors’ desks for approval. In typical fashion, many worked late into last night and this morning in order to get everything done by the new year. However, a few states still need to work out some kinks. Massachusetts, for example, approved an interim spending plan that will cover the commonwealth’s spending through this month, but has yet to finalize a budget for the current fiscal year.

Click here for a table of enacted and proposed budget bills for each state, where applicable.

Overall, COVID-19 did not affect state budgets quite as severely as anticipated early in the public health emergency. That being said, both general fund spending and revenue levels remain below pre-pandemic projections according to NASBO’s Spring 2021 Fiscal Survey of the States.

States that are especially reliant upon tourism, leisure, and/or energy for revenues, as well as those with higher unemployment rates, generally experienced larger negative impacts on their budgets. As a result, these states typically recommended more modest budgets for FY 2022 than their counterparts that weathered the storm better.

On the whole, governors proposed a 5% increase in general funding spending for FY 2022 when compared to estimated FY 2021 spending levels. This was largely driven by federal monies from the COVID-19 relief and packages and unanticipated surplus funds from FY 2021.

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