State budgets

A bipartisan agreement on a continuing resolution to keep the government open fell apart after intervention from President-elect Trump and Elon Musk, raising concerns about federal funds flowing to states, local governments, and infrastructure projects.

A spike in inflationary costs means a tough road ahead for Washington lawmakers as they take up the budget in the new year.

Federal funds flowing from the American Rescue Plan Act must be obligated by Dec. 31 as the threat of a clawback looms as a possibility.

Overall state and local government credit conditions will remain neutral, Fitch Ratings says, though some storm clouds may be on the horizon.

Political change in Washington and the looming budget battle is raising anxiety in state legislatures.

The rating agency cited an easing of the state's fiscal challenges for lifting the outlook on the state's Aa2 rating to stable from negative.

Legislation for a local government revenue sharing trust fund in Michigan has stalled in the state Senate. On Tuesday, supportive officials gathered in Lansing.

AI champ Nvidia and three other tech companies are driving a stock market surge resulting in California revenues coming out $7 billion above expectations set when the 2024-25 budget was approved in July.

States, cities, trade groups look toward uncertain future

Public pension benefit improvements could put credit pressure on states that enact them, the rating agency said this week.

A little-noticed program in Ohio's capital budget is drawing attention after a nonprofit advocacy group called its grants to religious groups unconstitutional.

Votes on Amendment A, which would have allowed excess income tax revenue earmarked for public education to flow into the state budget, will not be counted.

The California State School Board Association has sued over an education funding work-around included as a trailer bill in the budget.

As the economy normalizes, state revenues are shrinking

An outlook revision to positive for the state's Aa2 general obligation rating comes as a methodology update led to downgrades for certain revenue bonds.

After getting positive outlooks from three rating agencies since 2023, Oklahoma received its first upgrade.

Florida's official outlook indicates the state government faces a $10 billion deficit by mid-2028 without major tax and spending changes.

California's state government typically pushes out billions of dollars of debt from August to November. This year there may be a shift in buy side sentiment.

General fund revenue growth of only 1.1% in the fiscal year that ended Saturday, marks a continued slowdown since fiscal 2022's 26.4% increase.

Nebraska Gov. Jim Pillen signed into law a package of bills that includes caps on spending authority for local cities and counties.