Ten States Begin FY2018 Without Budget In Place

4 min readBy: Nicole Kaeding, Morgan Scarboro

For the overwhelming majority of states, state fiscal years begin on July 1, with 46 of the 50 states beginning on the date. As the calendar moves into July, there are still a number of states without budgets for the now-started fiscal years. As of July 3, 10 states are currently without budgets for the 2018 fiscal year.

Below is a quick summary of the status in these states:

Connecticut

After failing to pass a budget, Governor Dannel Malloy (D) issued a budgetary executive order to control spending to avoid a government shutdown. The legislature also failed to vote on his short-term budget, but House Democrats have proposed their own $40 billion biennial budget and plan to vote July 18. House Republican Leader Themis Klarides also said Republicans have a budget that is ready for a vote.

Illinois

Update (7/7/2017): Illinois lawmakers on July 7 completed an override of the governor’s veto, enacting a budget that increases the income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rate from 3.75 percent to 4.95 percent.

Illinois has entered its third year without a budget. The Illinois House passed a $5 billion, permanent tax increase over the weekend, though Governor Bruce Rauner (R) has promised to veto the proposal.

Maine

Update (7/5/2017): On July 4, LePage signed a budget compromise that eliminates the 3 percent income tax surcharge and excludes the proposed lodging tax increase.

After failing to pass a budget, Maine entered its first shutdown in 26 years, and there’s no clear end in sight. The stalemate hinges on a few key issues: a hike in the lodging tax from 9 percent to 10.5 percent, the elimination of the 3 percent income tax surcharge that voters passed in November, and public education issues. The newest version of the budget includes the lodging tax increase, eliminates the surcharge, and increases public education funding but doesn’t include a statewide teacher contract that Governor Paul LePage (R) has insisted on. It’s not clear if Republicans or Governor LePage will pass a budget that includes the tax increase.

Massachusetts

Update (7/20/2017): On July 17, Gov. Baker signed a budget that included an additional $320 million in spending cuts beyond what lawmakers had included.

Massachusetts legislators and Governor Charlie Baker (R) have yet to come to an agreement to finance the state’s new budget, and help close the remaining $430 million shortfall from now-ended fiscal year 2017. Revenue collections were below projections for FY2017, and FY2018’s budget assumes a 3.9 percent revenue increase above the forecasted FY2017 levels, creating a large hole. A $5.2 billion stopgap measure has been passed, and negotiations continue.

Michigan

Update (7/20/2017): Gov. Snyder signed a budget bill on July 14.

Legislators have sent Michigan Governor Rick Snyder (R) a budget, which includes a 2 percent spending increase. Governor Snyder is expected to sign the package.

New Jersey

Update (7/5/2017):The governor on July 4 signed a budget bill that included a compromise on the Horizon funding issue.

Governor Chris Christie (R) called for a government shutdown after legislators failed to pass a budget. The sticking point is whether Horizon Blue Cross Blue Shield of New Jersey, the state’s largest insurer, can be required to contribute $300 million to the state’s health-care fund. Governor Christie has said that he’d use his line-item veto to lower spending levels if that provision is not included in the final budget.

Oregon

Update (7/20/2017): Due to a lack of support, Oregon lawmakers on July 7 approved a budget that did not include a proposed gross receipts taxA gross receipts tax, also known as a turnover tax, is applied to a company’s gross sales, without deductions for a firm’s business expenses, like costs of goods sold and compensation. Unlike a sales tax, a gross receipts tax is assessed on businesses and apply to business-to-business transactions in addition to final consumer purchases, leading to tax pyramiding. .

While the Oregon budget has not been finalized, it appears to be close to completion now that a series of revenue increases have been identified by the legislature. The state plans to roll back a special tax rate schedule for smaller pass-through businesses and expand the state’s provider tax.

Pennsylvania

Update (7/20/2017): Gov. Wolf allowed the budget to become law on July 11 without his signature. Even though the $32 billion budget is now law, lawmakers still have to address a $2 billion budget gap.

The Pennsylvania legislature sent a budget to Governor Tom Wolf (D) on Friday, but still need to find $2 billion in new revenue. The legislature is considering borrowing the necessary funds to avoid tax increases.

Rhode Island

Update (8/8/2017): Rhode Island Gov. Gina Raimondo (D) on August 3 signed a budget that includes a reduction in the state’s car tax.

Rhode Island is operating without a budget after Speaker Nicholas Mattiello (D) ended Friday’s session early after learning the Senate was planning to make last-minute changes to the budget. The amended budget passed the Senate 30-5, but was not voted on in the House as members were already sent home. The Speaker says he does not plan to call the House back into session this summer.

Wisconsin

Wisconsin legislators and Governor Scott Walker (R) are struggling to finalize the state’s budget, with transportation funding as the sticking point. Governor Walker and legislators are hesitant to support an increase in the state’s gasoline tax. However, unlike other states, Wisconsin has not entered into a government shutdown as previous spending levels continue into the new fiscal year until a budget is adopted.

We will update this post as budgets are finalized.

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