State of the states: What to do with their surpluses?

• Twenty-eight governors have delivered State of the State addresses -- and many boast of surpluses
• States%27 2014 budgets are up 3.8%25 over 2013%2C and tax collections were ahead of projections
• Governors plan tax cuts%2C education spending and rainy day funds

WASHINGTON — After five years of cost-cutting, many of the nation's governors can boast of budget surpluses — and they have no shortage of ideas about how to spend them.

When President Obama delivered his State of the Union Address Tuesday, 28 governors had already updated their legislatures on the state of their states, and it's generally a rosy picture. To hear their governors tell it, the state of the states is stronger than it's been since the financial crisis of 2008.

Last year, 23 governors talked about putting surpluses into rainy day funds, according to an analysis by the National Governors Association. With just over half of governors giving updates so far this year, 19 have had the luxury of saving for a rainy day.

Overall, the states' 2014 budgets are up 3.8% over 2013, according to a survey of state finances released by the National Association of State Budget Officers last month. Tax collections were ahead of most states' projections last year.

Their plans for spending their surpluses — often in the billions — don't always follow predictable partisan patterns. In their State of the State speeches, Republican and Democratic governors alike are promising to invest more in education, reduce taxes and replenish rainy day funds.

• Wisconsin Gov. Scott Walker, Republican: "What do you do with a surplus? Give it back to the people who earned it. It's your money," he said. But not all of it — Walker also outlined plans to spend part of the surplus to "invest in our technical colleges, train workers for high-demand jobs, and support employment opportunities for people with disabilities."

• New York Gov. Andrew Cuomo, a Democrat: "We have gone from a $10 billion deficit to a $2 billion surplus in just three short years," he said. "We can increase our investments in education, health care, economic development and still provide more tax relief."

• California Gov. Jerry Brown, a Democrat: "Boom and bust is our lot and we must follow the ancient advice, recounted in the Book of Genesis, that Joseph gave to the Pharaoh: Put away your surplus during the years of great plenty so you will be ready for the lean years which are sure to follow," Brown said. He even threw his support behind a state constitutional amendment to require a "rainy day fund."

With the exception of high-profile governors — like Walker — who might have national aspirations, most governors tend to avoid ideological messages, said Daniel Coffey, an assistant professor at the University of Akron who has studied State of the State Addresses.

"They're more managerial in their approach to governing, especially in their approach to budgets," Coffey said. "I use the football analogy. ... You can have different philosophies of coaching — some like to pass the ball more, some like to run — but at the end of the day, you want to win the game. If you're ahead in the fourth quarter, you're going to run."

Not every governor is counting his surplus. In New Jersey, Gov. Chris Christie's State of the State Address was largely defined by the escalating scandal in which top aides had ordered the closure of the George Washington Bridge in an apparent pre-election political payback scheme.

But Christie, a Republican, also used the address to give a sobering account of the state's finances, saying a number of initiatives would have to wait — from lowering taxes to investing in education.

"Here is the simple truth. We cannot afford to do it right now. Why? Because of our pension and debt service costs," Christie said. "If we continue in an era where we believe we can choose everything, we are really choosing nothing."

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