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State Fiscal Health
When states manage their finances effectively, they are more likely to have money to invest in priorities such as schools, health care, and infrastructure. When they don’t, they may be forced to cut spending and raise taxes to pay off long-standing expenses and provide basic services to citizens.

To help states manage uncertainty, adapt quickly when crises arise, and ensure that their budgets are balanced over the long term, The Pew Charitable Trusts provides data, analysis, and guidance to policymakers on a range of fiscal and economic issues. We also aid states as they design, evaluate, and improve business tax incentives and other economic development programs to ensure that these programs are cost-effective, helping businesses grow and workers thrive. Through research and advocacy, we help states identify potential policy approaches and make informed choices about what works best for their communities.

Our research—including 50-state assessments—examines key trends in state finances and evaluates states on their performance, underscoring effective approaches and creating an environment for potential reform. 

We collaborate with policy leaders in states in a variety of ways:

  • Research: We conduct comprehensive and policy-relevant research. Our findings give states evidence-based options to address their unique fiscal challenges.

  • Information sharing: We serve as a resource to policymakers making research-driven decisions to improve fiscal outcomes in their states. We lead webinars, events, and meetings, and provide communications assistance to encourage state, regional, and national conversations on budget policies and practices.

  • Technical assistance and policy advocacy: We provide strategic technical assistance to states seeking to improve their budget practices. Our capabilities encompass policy design, including state comparative analysis; drafting or advising on legislation; offering testimony; and supplying other assistance, as requested.

Through these strategies, our goal is to help policymakers manage economic and revenue volatility, enhance transparency, and improve their states’ fiscal health over the long term.

Colorado State Capitol
Colorado State Capitol
Article

Proven Practices Can Help States Better Manage Their Budgets

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Article

In Colorado, as in many states, the abrupt onset of the COVID-19 pandemic in early 2020 and the ensuing recession presented significant, urgent budgetary challenges.

Two young boys facing back fly kites in a eroded neighborhood with construction signs, a truck, and unfinished roads
Two young boys facing back fly kites in a eroded neighborhood with construction signs, a truck, and unfinished roads
Opinion

Tax Limits Can Erode Local Fiscal Resiliency

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Opinion

Local governments play a critical role in daily American life, providing essential services such as responding to emergencies, maintaining and improving infrastructure, and supporting the economy. These important functions, and their costs, have been underscored during the pandemic.

Deadwood, South Dakota
Deadwood, South Dakota
Issue Brief

Local Tax Limitations Can Hamper Fiscal Stability

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Issue Brief

Tax limitations can create daunting challenges for cities and counties as they try to balance their budgets while maintaining the level of services their residents expect in the long term. And evaluating if and how states’ tax limitations impede the ability of local officials to manage their finances and provide services effectively is a key first step. Policymakers can then take the appropriate measures to ensure that local governments have the necessary tools to weather unexpected budget crises and strengthen their fiscal health into the future.

Restaurant worker cleaning
Restaurant worker cleaning
Article

Incentive Evaluations Limit Fiscal Doubt and Improve Effectiveness

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Article

Even as the pandemic forced states to shift their policy priorities and grapple with the economic downturn during the 2020 legislative session, governments continued to enact major reforms to economic development tax incentives.

Our Work

How states raise their tax dollars
How states raise their tax dollars
Data Visualization

How States Raise Their Tax Dollars, FY 2021

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Data Visualization

Taxes make up about half of state government revenue, with two-thirds of states’ total tax dollars coming from levies on personal income (39.8%) and general sales of goods and services (29.2%).

Data Visualization

Where States Get Their Money, FY 2021

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Data Visualization

The portion of state government revenue coming from federal dollars remained inflated by billions in COVID-19 pandemic relief aid in fiscal year 2021. The share increased by less than a percentage point from fiscal year 2020 levels but still set a record at 36.7%.

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Data Visualization

Fiscal 50: State Trends and Analysis

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Data Visualization

Fiscal 50: State Trends and Analysis, an interactive resource from The Pew Charitable Trusts, allows you to sort and analyze data on key fiscal, economic, and demographic trends in the 50 states and understand their impact on states’ fiscal health.