What’s ahead for state budgets in Fiscal Year 2026 (FY2026)? In this comprehensive overview, Sellers Dorsey experts lead you through each state’s enacted budget for the year, their Medicaid spending plans, and program changes for FY2026. See where states are looking to allocate funds to best address their most mission-critical challenges and align with the needs of their communities.
During this year’s budget season, 47 states enacted budgets. Of those, 32 states enacted annual budgets, and 15 states enacted biennial budgets for FY2026-FY2027. Three states have not enacted budgets as of the time of this publication: North Carolina, Michigan, and Pennsylvania.
Among other trends, our analysis shows:
- Education costs were a large item for states, including increasing popularity of school vouchers and teacher salary increases.
- Medicaid funding was a key consideration: most states allocated funding to provide services for vulnerable populations, bolster waivers, stabilize the Medicaid workforce, and build capacity for behavioral health services.
- Many states prioritized resources to build capacity for behavioral health services. At least 13 states put forward funding to bolster the number of in-patient beds available.
Explore more focus areas for states in FY2026 and gain insights into the expected impacts on state budgets following the passage of OBBBA for FY2027.
