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State Budgets Appear Stable, but Concerns About 'Uncertainty' Remain

Believe it or not, states are only a few months away from the start of their 2013 legislative sessions, and of course preparations get underway well before those official start dates. So how does the budget picture look for states going into next year, and what are the implications for K-12?

A new summer report from the National Conference of State Legislatures, released Aug. 7, says that the overall picture is stable and slowly improving for states in general, but that unemployment remains high in many states and fears about developments at the federal level and abroad (like European debt woes) could easily make the picture dark and stormy once again.

"State budgets remain susceptible to any economic shocks. The uncertainty at the federal budget level and Medicaid spending are a concern," said William Pound, executive director of NCSL, in a statement accompanying the report's release. "The bottom line: State budgets still face considerable challenges."

According to a survey conducted by the NCSL of the fiscal offices in 50 states and the District of Columbia, not one state said they were pessimistic about the fiscal 2013 outlook, and 32 states and the District of Columbia said they consider the picture "stable." (Those of you who bird-dog every piece of education policy news will realize that's the same number of jurisdictions that have received waivers from portions of the No Child Left Behind Act, although the states themselves don't match across both categories.) The six states that are "optimistic" are Alabama, Iowa, Montana, Nevada, New Jersey, and North Dakota. Eleven states remain concerned, including relatively large states like New York and Illinois. Florida did not respond to this question.

States such as California, Idaho, Louisiana, and Utah also report K-12 funding as one of their top three budget challenges heading into fiscal 2013.

On average, states are anticipating a 3.7 percent growth in general fund revenues for 2013, while only a 2.4 percent growth in general fund appropriations. Since K-12 education generally calls upon significant state budget resources, this touches on a key question for schools: Will states simply "rebuild" their education spending to prior levels, or will new approaches take the place of traditional strategies surrounding base per-pupil spending? (Of course, many states have recently made the case that compared to base spending in 2006, and assuming that tax revenues were lower in 2009 than 2006, they have in fact "maintained" K-12 spending, although that argument will seem odd to some observers.)

To keep up with the latest state education news, make sure you follow State EdWatch's Twitter feed @StateEdWatch.

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