Per-Capita inflation adjusted state spending has more than doubled since 1970
Despite an improved September forecast and revenues growing overall (8.6% from 2017-19), a budget deficit is still projected for the current 2019-21 budget. While revenues are projected to grow by nearly $4 billion during this biennium, state spending is currently projected to increase by 20%. How do these spending and revenue numbers track historically?
According to the Legislative Evaluation and Accountability Program (LEAP) Committee, state operating spending has increased on a per-capita inflation adjusted basis by 150% since 1970. The state budget spent $1,675 per-capita in 1970. That number is projected to be $4,192 in 2021. Again, these dollar amounts are adjusted for inflation.
These per-capita spending increases are further illustrated by the rapid growth of the state operating budget. In 2007-09, the operating budget was approximately $32.1 billion. The enacted 2019-21 budget is currently $53.7 billion (NGF-0).
Even though the state is in the midst of a global pandemic and government-imposed economic restrictions, state revenues are still projected to increase by 8.6% for the 2019-21 biennium. During the great recession, however, revenues actually dropped by 5.5% between 2009-11 and 2007-09.
Although a budget deficit is projected and state law requires the liquidation of a cash deficit by the Governor or legislature, no special session is expected before the 2021 session. The question lawmakers will face when they finally do address the budget is with revenues still growing by nearly $4 billion, will they work to reduce the rate of spending increase or instead try to impose new tax increases on employers and individuals already trying to recover from the government-imposed COVID economic restrictions?