As state legislatures begin to debate and implement costly and complex state spending measures, lawmakers are facing one of the most serious costs overruns in the nation: state-level predictions of spending growth for future years.
A $100 billion-plus bill that Congress passed in 2015, the NextGen State Forecast Act, sets a new benchmark for state-specific predictions of future spending for the coming years, as well as other programs.
It includes a $1 trillion plan for college tuition and fees, a $4.5 trillion plan to build new roads, bridges and airports, and $1.6 trillion to build infrastructure.
But it is also a significant expansion of state spending, with the largest share of the bill going to transportation, $2.5 billion for roads and bridges, $300 million for schools, and another $200 million for public safety.
The bill also includes an expansion of funding for veterans’ health care and $100 million to fund public safety and veterans’ education programs.
But the legislation does not go far enough, experts say, and it could drive up future spending.
“If you get to $100,000 and you want to get to a billion, you’re going to get there, but if you’re getting to $1 billion, then you’re not going to,” said David R. Ries, an associate professor of public policy at Rutgers University.
“It’s a serious problem.”
To some, this is not surprising, said David P. Cohen, the director of the Center for State and Local Government at the University of Illinois at Chicago.
The NextGen state forecast bill was passed with a strong bipartisan majority, he said.
But there are many provisions in the bill that would be a huge deal to the Republican-led legislature.
The state forecast system would include a statewide forecasting model to calculate projected spending in every state.
The forecast would also include a forecast for local governments in each state, including a forecast of spending in each local government district.
The models would be made public and the state would share them with the public.
The legislation also calls for a national system to predict future spending, called a NextGen NextState forecast.
It would be designed to allow states to share state-wide projections with the federal government, with federal agencies, and with the private sector.
The National Association of State Budget Officers (NASBBO) has said that the legislation could lead to more than $1,000 billion in future spending growth in each of the next decade.
“The NASBBO says that the NextState forecasts could lead over time to additional revenue that would help address the long-term fiscal challenges facing states,” according to the report, released last month.
While the NextGEN bill has some provisions that might be problematic for states, including the provision that would require state agencies to release the forecasts publicly, many analysts agree that the bill is a positive step forward for the states.
The NASMBO report noted that “many of the state-based projections have already been publicly released by states and their governors.”
The report also said that NextGen forecasts have been available for nearly four decades, and that many states have already adopted them.
The federal government is not obligated to share its forecasts with states, but the NASBPO said the bill would create a national platform to share NextState predictions.
“Congress has clearly made it clear that states should be able to determine their own spending, and states should have access to the federal NextState projections,” said Sarah L. Kipke, executive director of NASBOP.
“We welcome the bipartisan nature of the legislation and look forward to working with Congress to move this forward.”
The NASBEs report also noted that the bills has “a wide range of other elements that are expected to help states achieve more predictable spending growth.”
“While the bill will undoubtedly be unpopular with many states, the bipartisan support in the legislation will help improve the overall package,” Kipkel said.
The nonpartisan Center for Budget and Policy Priorities estimates that the $100-billion-plus NextGen bill would lead to $3.2 trillion in savings in 2019, and would boost the national economy by $9.4 trillion in 2024.
The group said it expects this bill to spur the formation of more than 3,000 new jobs and boost the U.S. gross domestic product by $1-trillion.