Industry News

Recently, the National Association of State Budget Officers (NASBO) released their semi-annual report, The Fiscal Survey of States: Spring 2026. 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 2027 and provides updated estimates for general fund spending, revenue and balances for fiscal 2026 as well as actual data for fiscal 2025. According to NASBO, in fiscal 2027, 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 2027, the recommended budgets are estimated to increase by 0.6% for general fund spending. In fiscal 2027, 22 states are projecting lower general fund spending in recommended budgets compared to fiscal 2026 levels. In fiscal 2026, states estimated total general fund spending of $1.38 trillion, up 3.9% from the states’ originally enacted budgets for fiscal 2026. This increase was partially due to supplemental appropriations and one-time expenditures funded by surplus balances.

Other key findings include:  

• For fiscal 2026 general fund revenue collections, 29 states reported exceeding original budgeted revenue projections, while nine states reported being on target to original estimates and 11 reported being below estimates.
• For fiscal 2027, revenue projections are 2.5% higher than current estimates for fiscal 2026.
• For fiscal 2027, governors’ budgets propose a combination of tax policy changes with 14 states recommending net increases and 19 states recommending net decreases, which would be a combined near-zero net impact on general fund revenues.
• As a share of general fund spending, the median rainy day fund balance in fiscal 2026 and fiscal 2027 are expected to be maintained or increase although the balance as a percentage of expenditures is projected to decline slightly due to general fund spending increasing faster than reserves in the same year. The median rainy day fund balance decreased for the first time since the Great Recession, declining from an all-time high of 14.9% in fiscal 2024 to 13.5% in fiscal 2025. The current estimate for the median balance for fiscal 2026 is 13.1% and is projected to slightly decrease to 12.6% in fiscal 2027.
• Total balances that include rainy day funds and general fund ending balances represented 31.7% as a share of total general fund expenditures at the end of fiscal 2025; as states draw down general fund balances, total balances are projected to be 23.5% of general fund expenditures in fiscal 2026 and 20.2% in fiscal 2027.   

The full report and summary are available here.