Tax revenue growth has led to less restrictive budgets.
- State legislators across the country have enacted $41.1 billion in appropriation increases for FY2019
- Thirty six of 50 states are collecting tax revenue that is comparable to what was being received before the recession.
- The appropriations, along with federal funding, could have a significant economic impact
In the decade since the financial crisis, elected officials cut spending, deferred major infrastructure maintenance and repairs, and put large projects on hold. But there are some indications that the situation is finally starting to change.
Tax revenues flowing into state coffers has risen. Additionally, 36 of 50 states are collecting tax revenue that is comparable to what was being received before the recession.
As a result, state legislators across the country have enacted $41.1 billion in appropriation increases for FY2019 that will cut across all program areas. Notably, $12.7 billion in new appropriations were enacted in FY 2018.
New York’s tax collections, unlike that of most other states, are down for the year. Still, lawmakers are poised to expand the state’s budget by roughly 2%, or $176 billion.
Gov. Andrew Cuomo has said that the state will invest $2.5 billion for clean water infrastructure and has proposed $150 billion for other infrastructure projects over the next five years. That amount includes $66 billion for transportation and $9 billion for affordable housing.
Earlier this year, Texas’ Comptroller of Public Accounts increased the state’s revenue estimates by approximately 8% to $9 billion. As a result, the state could have $119.12 billion to spend in the next biennium.
Texas’ legislators are currently focused on funding for education, but infrastructure funding is also being discussed. Other anticipated spending includes more than $1 billion in disaster recovery funds for Hurricane Harvey-related damages.
Further west, the state of Nevada’s latest budget has allocated $946 million in funding over the amount approved by the legislature in the last biennium. The new budget includes money for information technology projects such as an $11.5 million upgrade to the state’s criminal justice information system and $109 million for school security.
North Dakota’s state budget has increased by roughly 47% since the Great Recession as a result of having more tax revenue. Elected officials there have proposed that approximately $280 million be appropriated for city, county, township and airport infrastructure projects.
The aviation funding, which is being called Operation Prairie Dog, will allow cities and counties to be eligible for state funds from oil impact dollars. The state’s airports have seen significant increases in traffic so there appears to be consensus that funding should flow quickly to aviation projects.
If Congress appropriates more funding for infrastructure spending at the regional governments — as most believe it will — the impact for economic stimulus will be even greater.
Overall, it appears that the stage is set for the country’s elected officials to address the nation’s need for infrastructure and technology upgrades that are long overdue.