Industry News

Recently, the National Association of State Budget Officers (NASBO) released their semi-annual report, The Fiscal Survey of States: Spring 2025. The report updates information on the states’ fiscal conditions and presents aggregate and individual data on the states’ general fund receipts, expenditures and balances. The survey was conducted by NASBO and completed by the governors’ state budget officers in all 50 states.   

The report highlights governors’ budget proposals for fiscal 2026 and provides updated estimates for general fund spending, revenue and balances for fiscal 2025 as well as actual data for fiscal 2024. According to NASBO, in fiscal 2026, general fund ending balances are expected to continue declining for the third consecutive year, but are projected to remain elevated compared to historical levels.

For fiscal 2026, the recommended budgets are estimated to increase by 0.8% for general fund spending. In fiscal 2026, 24 states are projecting lower general fund spending in recommended budgets compared to fiscal 2025 levels and the reported median annual growth rate is 0.0%. In fiscal 2025, states estimated total general fund spending of $1.30 trillion, up 5.1% from fiscal 2024.

Other key findings include: 

• For fiscal 2025 general fund revenue collections, 34 states reported exceeding original budgeted revenue projections, while nine states reported being on target to original estimates and seven reported being below estimates.
• For fiscal 2026, revenue projections are 2.8% higher than current estimates for fiscal 2025, which would mark a fourth consecutive year of modest revenue growth.
• For fiscal 2026, governors’ budgets propose a combination of tax policy changes with 14 states recommending net increases and 20 states recommending net decreases.
• As a share of general fund spending, the median rainy day fund balance is expected to be maintained or increase although the balance as a percentage of expenditures declined in fiscal 2025 due to general fund spending increasing faster than reserves in the same year. The median rainy day fund balance is projected to decline from an all-time high of 14.6% in fiscal 2024 to 12.8% in fiscal 2025 and slightly increase to 12.9% in fiscal 2026.
• Total balances that include rainy day funds and general fund ending balances represented 31.1% as a share of total general fund expenditures at the end of fiscal 2024; as states draw down general fund balances, total balances are projected to be 25.2% of general fund expenditures in fiscal 2025 and 21.9% in fiscal 2026.  

The full report and summary are available here.