State Spending Expected to Grow at Lowest Rate since Great Recession


The state spending across the country is expected to grow at the lowest rate since the Great Recession.

For the fiscal 2018, the projected total general fund spending is $830.2 billion, up 2.3%. It is lowest growth rate since fiscal 2010, according to a study released by the National Association of State Budget Offices (NASBO).

Over the past several years, states recorded moderate spending growth. The uncertainty in federal policy and unpredictable revenues prompted states to slow down on spending.

States focus spending on education and Medicaid

Most states focused their spending on K-12 education. It is the largest single portion of the state general fund spending. The study showed that 38 states increased spending on education while 10 states made cuts. The net increase in education spending is $8.6 billion this year.

Aside from education, states also decided to spend more on Medicaid. The states collective spending for the program is $2.6 billion higher from their general funds this year. According to NASBO, the amount is $5 million more if Ohio’s Medicaid spending included. Ohio’s spending for the program comes from special funds.

States approved cautious budgets for fiscal 2018

Based on the study, 26 states approved general spending increases below 2% while 15 states reduced spending next year.