Executive Summary
After three years of record growth, state budgets have shifted into belt-tightening. Enacted FY2026 general fund spending across the 50 states is essentially flat versus FY2025, and nearly half the states enacted nominal spending cuts. Governors' FY2027 proposals continue the squeeze. But the picture is uneven by program area: K-12, Medicaid, and capital programs kept growing in most states through FY2025, while higher education and corrections flattened. This report shows, state by state, where funding was added and where it was cut — and which budget-management levers each state is pulling.
- Flat is the new up: with 50-state general fund growth at -0.2% for FY2026 and 21 states spending less than last year, lead with consolidation, lifecycle extension, and cost-takeout economics — not net-new programs.
- 24 states enacted targeted cuts and 17 are freezing hiring or eliminating vacant positions for FY2026 — position automation, managed services, and AI-assisted operations as the answer to "do more with fewer people."
- Growth pockets remain: K-12 spending is still rising fastest in Hawaii, Maryland, Mississippi, Alabama, California; capital programs are growing in Kentucky, Idaho, Rhode Island, Mississippi, Nevada.
- Mid-year FY2026 actions are already underway in 6 states that trimmed budgets after enactment — expect procurement slowdowns and re-scoping in those states; protect renewals early.
General Fund, State by State
General fund expenditures: FY2025 (preliminary actual, the fall-survey basis for the FY26 change), FY2026 enacted, and the governor's FY2027 proposal. Mid-year shows net post-enactment FY2026 spending changes reported to NASBO (supplementals net of cuts).
| State | FY2025 | FY2026 enacted | FY26 Δ | FY27 proposed Δ | Mid-year FY26 | FY26 actions |
|---|---|---|---|---|---|---|
| Alabama | $14.2B | $13.7B | -3.4% | -1.1% | +$447M | — |
| Alaska | $6.4B | $6.0B | -7.0% | -4.7% | +$427M | Targeted cutsHiring freeze |
| Arizona | $16.2B | $17.6B | +8.2% | +4.9% | — | — |
| Arkansas | $6.3B | $6.5B | +2.9% | +8.0% | — | Hiring freeze |
| California agencies | $234B | $228B | -2.2% | +4.5% | +$3.7B | Across-the-boardTargeted cutsHiring freeze |
| Colorado | $18.4B | $17.3B | -6.2% | +3.7% | +$164M | Across-the-boardTargeted cuts |
| Connecticut agencies | $23.4B | $24.0B | +2.6% | +4.5% | +$500M | Targeted cuts |
| Delaware | $6.9B | $7.3B | +4.8% | +3.8% | — | Hiring freeze |
| Florida agencies | $53.2B | $55.3B | +4.0% | -3.7% | — | Targeted cutsHiring freeze |
| Georgia agencies | $36.3B | $35.9B | -0.9% | -12.2% | +$5.7B | — |
| Hawaii | $10.9B | $11.3B | +3.7% | +1.2% | −$145M | Targeted cutsHiring freeze |
| Idaho | $5.3B | $5.6B | +5.2% | -1.5% | −$116M | Across-the-board |
| Illinois | $55.3B | $56.3B | +1.8% | +1.3% | — | — |
| Indiana agencies | $22.9B | $22.9B | +0.3% | +0.2% | — | Across-the-boardTargeted cuts |
| Iowa | $8.9B | $9.4B | +5.3% | +2.8% | — | — |
| Kansas | $10.3B | $11.4B | +10.3% | -1.2% | +$298M | Targeted cuts |
| Kentucky | $15.9B | $17.0B | +6.9% | -1.9% | −$156M | — |
| Louisiana | $13.0B | $12.2B | -6.2% | -0.5% | +$454M | Targeted cutsHiring freeze |
| Maine | $5.5B | $5.8B | +5.3% | +2.4% | +$88M | — |
| Maryland | $27.6B | $27.0B | -2.0% | -0.6% | +$986M | Across-the-boardTargeted cutsHiring freeze |
| Massachusetts | $52.3B | $49.6B | -5.1% | +2.0% | +$1.9B | Targeted cutsHiring freeze |
| Michigan | $15.4B | $14.1B | -8.2% | -2.1% | −$212M | Targeted cutsHiring freeze |
| Minnesota | $35.5B | $33.0B | -7.1% | -2.3% | — | Targeted cuts |
| Mississippi | $7.0B | $7.1B | +1.6% | +16.4% | — | — |
| Missouri agencies | $14.1B | $15.7B | +11.4% | +1.4% | +$342M | Targeted cutsHiring freeze |
| Montana | $3.7B | $3.4B | -8.6% | +10.3% | — | — |
| Nebraska | $5.5B | $5.5B | +0.2% | -1.8% | −$95M | Targeted cutsHiring freeze |
| Nevada | $6.7B | $6.7B | 0.0% | -8.5% | — | — |
| New Hampshire agencies | $2.0B | $2.0B | -2.6% | +0.6% | — | Across-the-boardTargeted cutsLayoffsHiring freeze |
| New Jersey | $57.7B | $57.7B | 0.0% | +1.7% | +$967M | Across-the-board |
| New Mexico | $13.8B | $13.6B | -1.2% | -2.2% | — | — |
| New York agencies | $105B | $126B | +19.5% | +1.2% | — | — |
| North Carolina | $31.3B | $31.9B | +1.9% | +6.5% | +$1.4B | Hiring freeze |
| North Dakota | $2.5B | $3.1B | +25.9% | 0.0% | — | — |
| Ohio agencies | $31.1B | $30.8B | -0.8% | -0.8% | — | — |
| Oklahoma | $10.6B | $10.4B | -2.0% | -4.8% | +$2M | Targeted cuts |
| Oregon | $17.0B | $18.3B | +7.4% | +4.1% | +$199M | Targeted cutsHiring freeze |
| Pennsylvania | $47.9B | — | — | +5.4% | +$390M | Targeted cutsHiring freeze |
| Rhode Island | $5.6B | $5.8B | +3.8% | +2.2% | +$16M | Targeted cuts |
| South Carolina | $13.8B | $14.1B | +2.2% | +5.1% | — | — |
| South Dakota | $2.4B | $2.5B | +1.2% | -1.0% | +$38M | Targeted cuts |
| Tennessee | $23.1B | $25.8B | +11.5% | -0.9% | +$98M | — |
| Texas agencies | $98.9B | $95.9B | -3.1% | -30.5% | — | — |
| Utah | $12.7B | $11.8B | -6.5% | +2.4% | −$13M | — |
| Vermont | $2.6B | $2.5B | -4.8% | -0.6% | +$47M | Targeted cuts |
| Virginia | $36.6B | $32.9B | -9.9% | — | +$867M | — |
| Washington | $35.6B | $35.5B | -0.2% | +1.8% | +$1.2B | Targeted cutsHiring freeze |
| West Virginia | $6.0B | $5.8B | -2.8% | -3.6% | — | Targeted cuts |
| Wisconsin | $21.5B | $22.7B | +5.7% | +1.2% | +$48M | — |
| Wyoming | $2.0B | $2.0B | 0.0% | -10.2% | — | — |
Agency Drill-Downs
For 10 states so far, we've parsed the actual enacted budget documents to agency level — every agency's prior vs. current funding, validated against each document's own totals. Each state's page carries the full table; the biggest movers are below. Bases differ by state (all funds vs. state funds vs. general fund; annual vs. biennial) — compare within a state, not across states.
| State (drill in) | Statewide | Biggest increase | Biggest cut |
|---|---|---|---|
| California FY2025-26 (2025 Budget Act, enacted Jun 2025) → FY2026-27 (2026 Budget Act, AB 109, enacted Jun 2026) |
$321.05B → $351.71B +9.5% | Education (K-12 and Higher Education) +$15.35B | General Government (incl. tax relief, statewide expenditures) −$2.07B |
| Connecticut FY2024-25 biennium (enacted Jun 2023) → FY2026-27 biennium (enacted Jun 2025) |
$51.45B → $56.03B +8.9% | Department of Social Services +$1.5B | Department of Revenue Services −$13.3M |
| Florida FY2025-26 (SB 2500, Ch. 2025-198, enacted 2025) → FY2026-27 (HB 5001E, Ch. 2026-232, enacted Jun 2026) |
$115.14B → $114.46B -0.6% | Agency for Health Care Administration +$1.52B | Transportation, Dept. of −$1.89B |
| Georgia FY2026 enacted (HB 68, 2025 session) → FY2027 enacted (HB 974, signed May 12, 2026) |
$37.76B → $38.5B +2.0% | Education, Department of +$480.5M | Georgia State Financing and Investment Commission −$715.7M |
| Indiana FY2024-25 biennium (HEA 1001-2023, enacted 2023) → FY2026-27 biennium (HEA 1001-2025, enacted Apr 2025) |
$44.6B → $46.2B +3.6% | Office of Medicaid Policy and Planning +$1.8B | Indiana Economic Development Corporation −$712.6M |
| Missouri FY2026 enacted (final after veto) → FY2027 enacted (signed Jun 2026, effective Jul 1, 2026, final after veto) |
$50.83B → $49.84B -2.0% | Social Services +$1.16B | Economic Development −$1.89B |
| New Hampshire FY2024-25 biennium (enacted 2023) → FY2026-27 biennium (enacted Jun 2025, chaptered final) |
$15.05B → $16.46B +9.4% | Health and Human Svcs Dept. +$666.2M | University System of NH −$26M |
| New York FY2026 (Apr 2025-Mar 2026, FY26 Enacted Budget Financial Plan) → FY2027 (Apr 2026-Mar 2027, FY27 Enacted Budget Financial Plan, Jun 2026) |
$146.1B → $161.13B +10.3% | Health, Department of +$4.46B | Temporary and Disability Assistance, Office of −$617.8M |
| Ohio FY2024-25 biennium (HB 33, enacted Jul 2023) → FY2026-27 biennium (HB 96, enacted Jun 2025) |
$190.71B → $200.12B +4.9% | Ohio Department of Medicaid +$6.47B | Department of Development −$938.6M |
| Texas FY2024-25 biennium, estimated/budgeted (GAA, HB 1, 88th Legislature; incl. HB 500 supplemental) → FY2026-27 biennium, appropriated (GAA, SB 1, 89th Legislature, enacted Jun 2025) |
$339.89B → $327.96B -3.5% | Texas Education Agency +$12.81B | Trusteed Programs within the Office of the Governor −$9.07B |
Program Areas: Added vs. Cut
Total-fund spending change in FY2025 (latest 50-state actuals/estimates, all fund sources) by program area — the categories NASBO tracks across every state. "GF" shows the state's own general fund change — the cleaner policy signal, since total-fund swings often reflect federal aid timing (e.g., the K-12 ESSER expiration).
K-12 Education
median +0.1%Total K-12 spending was nearly flat (+0.8%) in FY2025: state funds grew 4.6% (median +6.0%) while federal funds fell 15.9% as temporary pandemic education aid wound down. Federal dollars are still 15.6% of K-12 spending vs. 13.6% pre-pandemic — more decline is coming.
Higher Education
median +4.0%Total higher-ed spending rose 3.9% in FY2025; general fund support grew 2.6% after +7.6% in FY2024, as states propped up affordability and institutions facing enrollment declines (public FTE enrollment fell in 41 states over the past decade).
Medicaid
median +6.8%The fastest-growing category: +8.4% total in FY2025 with state funds up 13.2%, as the expired enhanced federal match shifted costs onto states amid provider rate increases and rising long-term-care, pharmacy, and behavioral-health costs.
Corrections
median +6.6%Total corrections spending rose 4.0% in FY2025 (general fund +4.1%). It is the most general-fund-reliant category (84.7% GF), and pay raises for recruitment and retention were a priority in many states' FY2025 budgets.
Transportation
median +6.4%+7.0% total in FY2025 after +15.5% in FY2024 — second-fastest growth behind Medicaid, powered by IIJA federal dollars and states steering surpluses to infrastructure. Over 60% is funded from earmarked revenues like motor-fuel taxes.
All Other
median +8.0%+6.3% in FY2025. The catch-all for most state agencies — CHIP, behavioral health, public health, child welfare, courts, constitutional officers — still normalizing after CARES/ARPA-driven swings.
Capital (all program areas)
median +6.1%Capital spending grew 5.9% in FY2025 (state funds +10.7%; federal funds −0.9% as ARPA winds down). Transportation is ~63% of all state capital outlays; higher education is the next largest at ~10%.
Where the Money Goes
Each state's FY2025 spending mix across NASBO's six program areas (all fund sources), with FY2025 debt service alongside. States that spend a bigger share on Medicaid or K-12 have less discretionary room when budgets tighten — hover any bar segment for exact shares.
Capital Programs
Capital spending grew 5.9% in FY2025 (state funds +10.7%; federal funds −0.9% as ARPA winds down). Transportation is ~63% of all state capital outlays; higher education is the next largest at ~10%.
Transportation
$118B · 63.2% of capital · +6.3%All Other
$27.5B · 14.7% of capital · +14.2%Higher Education
$19.4B · 10.4% of capital · +7.6%Environmental
$9.0B · 4.8% of capital · -27.7%K-12 Construction
$5.3B · 2.8% of capital · +21.5%Housing
$4.9B · 2.6% of capital · +41.0%Budget-Management Strategies
The levers each state is pulling — from NASBO's survey of enacted FY2026 budgets and governors' FY2027 recommendations. Targeted cuts and hiring freezes are the strongest "do more with less" buying signals.
| Strategy | Where |
|---|---|
| Targeted cuts · 24 states | AKCACOCTFLHIINKSLAMDMAMIMNMONENHOKORPARISDVTWAWV |
| Hiring freeze / vacancy elimination · 17 states | AKARCADEFLHILAMDMAMIMONENHNCORPAWA |
| Other fund transfers · 16 states | AZCACOCTFLINMEMDMANENJOKORRIVTWA |
| Prior-year fund balance · 12 states | AKCTHIMEMDMANENJNYOKRIVT |
| Revenue increases · 12 states | AKCACTMDMAMNNENHNJPARIWA |
| Medicaid program changes · 11 states | AKAZARCTMEMDMNNENHNCRI |
| Other · 9 states | AZLAMAMONYOKORPATN |
| Agency reorganization · 8 states | AKARLANENHORWAWV |
| Across-the-board cuts · 7 states | CACOIDINMDNHNJ |
| Rainy day fund draw · 6 states | AKCAFLMDOKPA |
| Pension / OPEB adjustments · 4 states | MDNENJWA |
| Reduce local aid · 4 states | AKMDNENJ |
| Deferred payments · 3 states | CAMANH |
| Layoffs · 1 state | NH |
| Early retirement · 1 state | MD |
| Employee benefit cuts · 1 state | NJ |
Proposed, not enacted — legislatures may change these.
| Strategy | Where |
|---|---|
| Targeted cuts · 22 states | COCTDEFLHIIDKSMDMAMIMONENHNJOKORPASDTNVTWAWV |
| Hiring freeze / vacancy elimination · 17 states | AKAZARCODEFLIDINLAMAMONENHORPAVTWA |
| Other fund transfers · 16 states | AZCOCTIDINKSMEMDMANENHNJOKORPAVT |
| Revenue increases · 14 states | AZCTDEILMEMONENHNJNYORPARIWA |
| Prior-year fund balance · 13 states | AZHIMEMDMAMONENJNYOKORVTWV |
| Medicaid program changes · 12 states | AZCACOMEMDMAMONENHNMWAWV |
| Pension / OPEB adjustments · 8 states | CACODEMDNENJPAWV |
| Rainy day fund draw · 7 states | AKCACOMEMDPAWA |
| Other · 6 states | AZCAFLOKORTN |
| Layoffs · 4 states | COMONHWA |
| Employee benefit cuts · 4 states | DEMONJWV |
| Across-the-board cuts · 3 states | CTNHWV |
| Agency reorganization · 3 states | AZCTNE |
| Reduce local aid · 2 states | MDNE |
| Deferred payments · 2 states | MAMO |
| Salary reductions · 1 state | CA |
| Privatization · 1 state | AZ |
Methodology & Caveats
- Fiscal 2026 general fund totals include Pennsylvania's proposed (not enacted) budget; the state had not enacted a FY2026 budget at NASBO's fall reporting deadline.
- Fiscal 2027 figures are governors' recommended budgets, not enacted appropriations. Virginia did not report a FY2027 proposal.
- States with biennial budgets (e.g., Texas) show large alternating year-over-year swings; compare across the full biennium.
- General fund figures exclude federal funds and other/dedicated funds; program-area figures are all-funds unless noted. Dollar figures are millions, as reported to NASBO by state budget offices.
- Program-area detail runs through FY2025 (NASBO's latest State Expenditure Report); statewide general fund figures run through enacted FY2026 and proposed FY2027.
- Spending mix, debt service, and capital-by-program figures are FY2025 estimates from the State Expenditure Report (Tables 4, 29, and 33–39); capital "programs" are construction/infrastructure outlays, not operating budgets. Program-area commentary is condensed from NASBO's chapter narratives.
Sources
- NASBO, The Fiscal Survey of States: Fall 2025 (enacted FY2026 budgets; FY2024-25 actuals)
- NASBO, The Fiscal Survey of States: Spring 2026 (governors' recommended FY2027 budgets; FY2026 estimates)
- NASBO, 2025 State Expenditure Report (spending by program area, FY2023-2025)
- NASBO Fiscal Survey of States (report hub)