These two state budgets are coming down to the wire. PLUS: new data on women in public finance and metro economies.

Happy Finance Friday! In this week’s issue I’ll look at what’s holding up budgets in two states, explain the rise of women in public finance and outline a new report on city metros by the U.S. Conference of Mayors.

Arizona and Pennsylvania still don’t have a budget

My newsletter this week for Route Fifty gave an update on state budgets for the upcoming fiscal year that starts July 1 for most places and detailed what states are doing with their surpluses. More than 40 states have passed budgets or have one waiting to be signed by the governor. A few, like California, are making adjustments based on new revenue projections before final approval. 

But Arizona and Pennsylvania still don’t have a budget agreement and with just three weeks until the start of the next fiscal year, avoiding a government shutdown could come down to the wire.

Arizona lawmakers are arguing about what (if anything) to do with the state’s $5 billion surplus. Some Republican lawmakers want to slash spending and cut taxes, others others have pet projects they want funded while still others like to see it go toward a few large investments and toward paying down debt. In April, lawmakers tried passing a “skinny” budget as a stopgap measure that used the current budget as a baseline and adjusted spending for inflation. But even that failed.

In Pennsylvania, which also has a $5 billion projected surplus, four Republican House incumbents lost re-election last month to challengers who said they weren’t conservative enough. The Pittsburgh Post-Gazette reports that their poor primary performances could inspire frustrated Republicans to use the budget as leverage to force Democrat Gov. Tom Wolf to expand voter ID, end mail-in voting or ban vaccine mandates.

The bottom line: The debate in both states is being driven by the national ideological split within the Republican party and that’s a problem because this budgeting season should not be that difficult. Which isn’t to say that Democrats agree on everything (Illinois’ two years without a budget rings a bell), but if it’s this hard to agree when the times are good what happens when the economy slows as many say it will this year? 

Depending on the outcomes of the upcoming midterm elections, the budget debates in Arizona and Pennsylvania could be a harbinger of things to come in other states where Republicans hold a slim majority in one or both legislative chambers (Michigan, Minnesota, New Hampshire).

The states where women are running public finance

New data shows that the Dakotas and Vermont have consistently led the nation over the past decade in having women filling top finance and budget roles in local government.