MCH BudgetAware Bulletin: Nine States Face Increased Budget Pressure

According to a new analysis of state budget conditions released by MCH, Inc., nine states face increased budget pressure compared to the prior analysis in May 2009. In the same time period, the budget outlook has improved for five states.

“The budget issues for states are the most severe since we began tracking them in 2002,” MCH President John F. Hood said. “While the overall economic outlook turned the corner during the second half of 2009, funding trends for state and local agencies lag behind the general economy.”

MCH has published four editions of its BudgetAware Bulletin report during the current economic downturn. The company provides strategic marketing data to companies that sell goods and services to institutions like hospitals, schools, churches, and city governments.

The company bases its analysis on a combination of budget statistics and published reports of the steps taken to bring budgets in line. Hood said that last year’s economic stimulus package continues to be important for state and local funding. “The funding was extremely helpful in many states,” Hood said. “In 2010, institutions will actually spend more stimulus money, $107 billion compared to $52 billion in 2009.”

The firm’s analysis groups states into five categories: Stable, Light, Moderate, Strong, and Severe. The report notes that funding conditions are improving for some states. The firm upgraded Vermont to Stable, Indiana to Light, Alabama and North Carolina to Moderate, and Ohio to Strong. “In each of these states, we see evidence that budget conditions are less severe than in our prior report,” Hood said.

Among states facing greater pressure, the firm shifted Missouri, Nebraska, and Texas to Light. Colorado, Kansas, New Mexico and Virginia are now classified as Moderate. The report now classifies Hawaii and Minnesota as facing Extreme Pressure, a category for states that are severely slashing core services and have continuing budget gaps in the years ahead.

The BudgetAware Bulletin report is available for download from MCH’s website. The 57-page document includes an overview of the economic conditions, marketing recommendations based on state conditions, and a state-by-state report that shows remaining stimulus funds available.