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The Latest on State Budgets

Most states started their 2011 fiscal year on July 1, and we’ve updated our analysis of the budget shortfalls — that is, the gaps between revenues and spending — that states closed when adopting their budgets.  As the map shows, nearly every state faced a shortfall for 2011; in 18 states, the shortfall exceeded a fifth of the state’s spending.


Three states haven’t yet finalized their 2011 budgets:  Michigan (whose fiscal year begins October 1), California, and New York.

By the time the fiscal year ends, we project states will have closed more than $140 billion in shortfalls for 2011, not counting the roughly $40 billion in Recovery Act assistance they’ll have for the year.  Those shortfalls come on top of the roughly $200 billion in shortfalls that states closed in fiscal years 2009-2010 combined (again, not counting Recovery Act assistance).

For 2012, states face an estimated $120 billion in shortfalls, and they’ll receive virtually no Recovery Act assistance, the vast majority of which will have expired.