While many of us have been working to tighten our budgets due to inflation, states across the country are seeing their budgets swell.
During 2021, states nationwide had $114.6 billion more in their budgets than they had the year prior, an all-time high, according to state and federal budget data analyzed by the Pew Research Center.
“Part of the state revenues, in addition to the good economy, is really a result of paying more average daily and that inflationary pressure has meant higher tax returns because you’re paying more, unfortunately, every single day on certain items,” said Glenn Hegar, the Texas Comptroller of Public Accounts.
The report stated 35 states reported having more money in their rainy-day funds in 2021 than they did they year prior: $37.7 billion, an increase of roughly 50% from a year earlier. Moreover, the report states, “states reported the largest annual increase in leftover general fund budget dollars (known as ending balances) in at least the past 21 years.”
With so much extra money, the decision on how to spend some of it will come down to each state legislature when it votes on its budget come January.
In Texas, Hegar says broadband access will be one of the issues on the table, but nationally, other issues like tax relief and road and highway infrastructure will be discussed as well. It just depends on where that help is needed in each state.
“[Addressing these issues] becomes much more real when you have a potential surplus than when you don’t have a surplus,” he said.
The report shows that 36 states posted increases in the number of days they could run government operations using rainy day funds alone compared with the previous year. On average, that number is 60% higher than it was the previous year.