Tough Fiscal Times for the States: How Did We Get Here? Implications for the Future National Governors Association Institute for Governors' Education Policy Advisors April 4, 2003 Scott Pattison Executive Director National Association of State Budget Officers 444 North Capitol Street, NW, Suite 642 Washington, DC (202)

General funds grew at historically high levels, until the “boom” ended Source: NASBO, Fiscal Survey of States

State budgets in the late 1990s: historic boom… followed by bust Source: NASBO, Fiscal Survey of States

The stock market impact Source: Federation of Tax Administrators

Revenues have shrunk Source: Fiscal Studies Program, Rockefeller Institute of Government

Economy is uncertain: consumer confidence is down Source: Economy.com

Every part of the budget impacted by tough times Source: NASBO, 2001 State Expenditure Report

What’s in “all other?” Public health Parks and recreation State police Employer contributions to pensions and benefits Information Technology Care for mentally ill and disabled Environmental Housing General aid to local government

K-12 spending Source: NASBO, 2001 State Expenditure Report

K-12 spending Source: NASBO, 2001 State Expenditure Report

K-12 spending Source: NASBO, 2001 State Expenditure Report

K-12 spending Source: NASBO, 2001 State Expenditure Report

Higher education spending Source: NASBO, 2001 State Expenditure Report

Higher education spending Source: NASBO, 2001 State Expenditure Report

Prepare for the future State revenue has always been cyclical Revenue will begin to meet projections -Maintain a long term vision-

444 North Capitol Street, NW, Suite 642 Washington, DC (202)