Fiscal Management Tools

Fiscal Management Tools
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A multi-year perspective on revenue and expenditures can help policymakers avoid crisis-driven decisions and unsustainable budget practices. 

States can use a variety of fiscal management tools to attain this longer-term view of their budgets and to manage uncertainty, including multiyear revenue and expenditure projections, budget stress tests, and contingency plans.

These tools help states evaluate their fiscal outlook over the long run, assess how much they should set aside in their rainy day fund to weather economic downturns, and sustainably fund vital programs and services, among other things.

Pew research provides policymakers with best practices—such as the implementation of these tools—to help them pursue long-term budget objectives that benefit their state. 

What is Budget Stress Testing?
What is Budget Stress Testing?
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What is Budget Stress Testing?

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How can lawmakers manage budget uncertainty while still meeting residents' needs? Our Kil Huh explains what budget stress testing is and how it works—and how states can use it in the months ahead.

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Article

Budget Stress Testing Helps States Prepare for Fiscal Distress

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Article

Budget stress tests help states estimate the potential financial shortfalls that could result from adverse events—a dramatic economic downturn, for example, or an outbreak of illness, such as the one caused by the novel coronavirus. Policymakers can use this data to plan ahead, helping to avert or limit a fiscal emergency and keep long-term priorities on track.

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Speeches & Testimony

Budget Forecasts and Contingency Plans Help States Prepare

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Speeches & Testimony

In a memo sent Aug. 20, 2021, to Colorado’s Office of State Planning and Budgeting, experts from The Pew Charitable Trusts discuss how two fiscal management tools—long-term budget projections and contingency plans—help states prepare for fiscal challenges.

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Issue Brief

How States Can Manage Midyear Budget Gaps

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Issue Brief

State governments generally adopt budgets that lawmakers believe are balanced, with sufficient revenue to pay for expenses. But because states typically enact their budgets before the start of a fiscal year, policymakers must rely on forecasts of how much revenue the state will collect and how much it will spend.

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