Flush With Federal Cash, States Set to Weather Stormy Congressional Budget Rift

State budgets are near-uniformly in the black following a 2020-22 Congressional spending spree that added trillions to the nation’s debt and fostered sharp discord between the House and Senate that, ironically, will likely delay adoption of the federal budget, raising the specter of a government shutdown.

MultiState Vice President of Tax Policy Morgan Scarboro (L-to-R), National Conference of State Legislatures Policy Specialist Erica MacKellar, S&P Global Ratings Managing Director for U.S. Public Finance Geoffrey Buswick, and Federal Funds Information for States Executive Director Marcia Howard participate in a ‘Budget Jeopardy’ session Aug. 14 during the three-day National Conference of State Legislatures 2023 Legislative Summit in Indianapolis, Ind., attended by more than 5,000 state lawmakers, legislative staffers, lobbyists, and advocates. National Conference of State Legislatures

INDIANAPOLIS, Ind.—Under normal circumstances, Congress failing to adopt an annual budget before the federal fiscal year begins Oct. 1 would be cause for alarm in state capitals across the nation.

But when House Speaker Kevin McCarthy (R-Calif.) announced on Aug. 14 that he would introduce a stopgap funding measure rather than push to complete deliberations on the Fiscal Year 2024 (FY24) budget when Congress returns from recess on Sept. 12, it came as no surprise to state lawmakers and fiscal analysts attending the Aug. 14-16 National Conference of State Legislatures (NCSL) 2023 Legislative Summit in Indianapolis.