State Revenue Growth Slows in FY 2016

By Bryan Sigritz (Originally Posted at NASBO)

NASBO_RGB_B_JPGNASBO recently conducted a short survey on year-end tax collections to help gain a better understanding of how states closed out fiscal 2016. As expected, revenue growth noticeably slowed for the recently concluded fiscal year. Twenty-eight states were able to provide preliminary data regarding fiscal 2016 tax collections. The survey results include:

  • The median growth rate for total general fund tax collections in fiscal 2016 was 2.3 percent for the 28 reporting states.
  • By comparison, the 50-state median growth rate in fiscal 2015 was 5.2 percent.
  • Sales tax collections had the largest median growth rate in fiscal 2016 at 3.4 percent, while personal income tax grew 2.9 percent and corporate income tax declined at a median rate of 9.8 percent.
  • 10 states saw revenues come in above their final projections for fiscal 2016, while 18 states were below.
  • Overall, for the 28 states reporting data, total collections were 0.8 percent below final projections.

The preliminary year-end tax collections reported by the 28 states are mostly similar to estimated figures in the Spring 2016 Fiscal Survey of States, whose field survey was conducted from February through April. For example, the Spring Fiscal Survey reported that the estimated 50-state median growth rate for fiscal 2016 was 2.8 percent. However, some of the results from the new short survey on year-end tax collections seem to indicate slower than anticipated revenue growth since the time the Fiscal Survey was conducted. While the majority of states in the Spring Fiscal Survey reported revenue collections higher than, or on target with, their most recent revenue projection, a majority of states in the new short survey showed revenues below their most recent projection.

State revenue growth slowed in fiscal 2016 for a number of reasons including the impact of low oil and natural gas prices on energy-producing states, the weaker stock market performance in calendar year 2015, and modest national economic growth. It is likely that the slow revenue growth will continue into fiscal 2017, with the median projected growth rate being 3.1 percent. In the fall, NASBO will release a new Fiscal Survey of States with updated figures for both fiscal 2016 and fiscal 2017.

GASB achieves Objectives with Remediation Obligations Statement

NewGASB(NEWS RELEASE) A Post-Implementation Review (PIR) of Governmental Accounting Standards Board (GASB) Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations (issued 2006), concluded that Statement 49 accomplished its objectives of providing more consistent, timely, and complete reporting of pollution remediation obligations by state and local governments.

“The PIR report on Statement 49 tells us that, overall, the standard provides creditors and other users of financial statements with useful information,” said GASB Chair David A. Vaudt. “The GASB acknowledges the issues raised by some governments in applying certain provisions of the Statement, and will consider those issues when addressing the provisions in the future.”

The PIR team developed its final report based on input from financial statement users, preparers, and auditors. The Statement 49 PIR team reached the following overall conclusions:

  • Statement 49 resolved the primary issues underlying its stated need. In particular, it achieved the objective of reporting pollution remediation obligations that is more consistent, timely, and complete.
  • Statement 49 provides creditors and other users of financial statements with useful information. Users of financial statements incorporate information about pollution remediation liabilities in their analyses when pollution remediation obligation amounts are significant. For most governments, however, pollution remediation obligation amounts are not significant.
  • Statement 49 is operational because it is understandable, can be applied as intended, and enables information about pollution remediation obligations to be reported reliably. The measurement of a pollution remediation liability requires judgment as with any other accounting estimate.
  • The changes made to financial and operating practices as a result of Statement 49 are not significant or unexpected.
  • There were no significant unanticipated consequences as a result of the adoption of Statement 49.
  • Overall, implementation and ongoing application costs associated with Statement 49 were not significant and were consistent with the GASB’s expectations.
  • Statement 49 achieved its expected benefits.

The PIR team had no standard-setting process recommendations as a result of the review.

The review of Statement 49 was undertaken by an independent team of the Financial Accounting Foundation (FAF), the parent organization of the GASB and the Financial Accounting Standards Board (FASB). The team’s formal report is available here. The GASB’s response letter to the report is available here.

With the completion of the GASB Statement 49 review, the PIR team has begun its review of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. For more information on the PIR process and to express an interest in participating in a review, visit the FAF website.

Marlowe Elected 2017 ABFM Vice-Chair

Marlowe_Justin-57cResults from ABFM’s recent election show Justin Marlowe with the University of Washington’s Daniel J. Evans School of Public Policy and Governance, will serve as our 2017 Vice-Chair. The organization’s Executive Committee will also welcome four new members this coming year.

Justin is the Endowed Professor of Public Finance and Civic Engagement, and Associate Dean for Executive Education at the Daniel J. Evans School of Public Policy and Governance, at the University of Washington. Justin has been at Washington since 2009, coming from the Kansas University. Justin has published three books and more than 50 articles covering a broad range of topics in public finance.

Justin served in local government in Michigan prior to his academic career and is a Certified Government Financial Manager. He earned his Bachelor’s and MPA degrees from Northern Michigan University and his M.A. and Ph.D. in Political Science from the University of Wisconsin-Milwaukee.

Justin has prior serving on the ABFM Executive Committee and was 2003 recipient of the Michael Curro Award for student research. He led efforts for his school to host this year’s ABFM Annual Conference in Seattle, which will take place October 6th thru 8th on the University of Washington Campus. He will serve as Vice-Chair of ABFM in 2017, Chair-Elect and Conference Chair in 2018, the Chair in 2019.

Three individuals were elected to three-year terms on the Executive Committee, starting January 1, 2017.

BobBlandRobert Bland is Endowed Professor in Local Government and Faculty Director, Center for Public Management, University of North Texas. Robert has been with the UNT faculty since 1982 and an original faculty member of their Department of Public Administration, where he served as Chair from 1992 to 2013. His teaching focus is on government financial management and revenue policy. His research work includes books and articles on local tax policy, municipal bond markets and governmental budgeting. Robert was elected as a fellow to the National Academy of Public Administration in 2012, and is a recipient of the Stephen B. Sweeney Academic Award from ICMA. Robert earned his Bachelors Degree at Pepperdine, Masters from University of Tennessee, and Ph.D. from University of Pittsburgh.

TimaTima Moldogaziev is Assistant Professor of Public Finance & Management at the School of Public & International Affairs, The University of Georgia. Tima’s research incorporates all elements of financial inter-mediation and regulation, municipal securities pricing and capital access for subnational government. He also conducts research on organizational empowerment and innovation. Tima earned his Bachelors Degree from American University of Central Asia, and his Masters and Ph.D. from Indiana University.

m_robbinsMark Robbins is Professor and Department Head for the Department of Public Policy, College of Liberal Arts and Sciences, University of Connecticut. Mark’s research focuses on public budgeting and finance. He serves as an advisor to the Debt Committee of the Government Finance Officer’s Association, the Commission for Peer Review and Accreditation and the Government Accounting Standards Advisory Group. Mark earned his Bachelors Degree from Gordon College, Masters in Public Affairs from University of Oregon and Ph.D. from the Maxwell School at Syracuse University.

cq5dam.thumbnail.319.319Wie Yusuf, Associate Professor of Public Service, Old Dominion University, was elected to a one-year term of the Executive Committee to fill out the remaining term of Bryan Sullivan, current Vice-Chair and 2017 Chair-Elect. Wie’s teaching work crosses over all of ODU’s public policy degree programs. Her research on public policy encompasses public finance, transportation, climate change and citizen engagement. Wie has authored and co-authored many papers covering these topics at local, national and international levels, encompassing and interconnecting with broader issues in urban policy. Wie earner her Bachelors Degree from Notre Dame, Masters from Indiana University and Ph.D. from University of Kentucky.

New leadership will attend their first meeting with the rest of the ABFM Officers and Executive Committee during the 2016 ABFM Annual Conference in Seattle.

2016 Conference Update

By Dan Smith, 2016 Conference Chair

Dan SmithThe conference begins in just 41 days! As you have seen, we will have a robust program this year, and we look forward to working with our generous host and premier sponsor, the Evans School of Public Policy and Governance at the University of Washington. As we put the finishing touches on the program, I write you with several important reminders.

First, be sure to reserve your hotel room by September 5, and to register for the conference by September 18 for the early rate.

Also, there’s still time to sponsor the conference! Ads are due September 9, so in addition to completing the online form please write our fundraising chairs, Jonathan Justice (justice@udel.edu) and Thad Calabrese (thad.calabrese@nyu.edu) if you intend to sponsor.

A more substantive update will come with the release of our finalized program. For now, please keep these deadlines in mind!

New School Year Brings Change, New Roles

Recognizing our Members in Transition

The new academic year has arrived, and with it, many ABFM members are at new schools, many in new and expanded roles. We are proud of these members, their accomplishments and all of the hard work that has brought them these opportunities:

Benjamin Clark, formerly at Cleveland State University’s Maxine Goodman Levin College of Urban Affairs, is now Assistant Professor in the School of Planning, Public Policy and Management, University of Oregon.

Sarah Larson, formerly at Georgia State University’s Andrew Young School of Policy Studies, is now Assistant Professor of Public Budgeting & Finance for School of Public Administration, University of Central Florida.

Dan Smith, formerly at New York University’s Wagner Graduate School of Public Service, is now the MPA Director for the School of Public Policy & Administration, University of Delaware.

Wie Yusuf, Associate Professor at Old Dominion University’s School of Public Service, has been appointed as a Provost Fellow to develop ODU’s new graduate program in public administration.

We know there are other members who have transitioned to new campuses and positions for the year, so please share your news with it. Email your transition announcements to abfm.lineitem@gmail.com. We look forward to publishing them in our September edition.