In an era of heightened economic uncertainty, state governments are facing unpredictable revenue as well as rising health care, education, and infrastructure costs. How policymakers choose to confront these challenges will affect states and the nation for years to come. Through both research and advocacy, Pew provides data, analysis, and guidance to help states navigate these fiscal challenges and identify potential policy approaches.
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.
Taxes and federal funds together account for 80.5% of revenue for the 50 states. Taxes are the largest revenue source in 46 states, while federal funds are greatest in four: Alaska, Louisiana, Montana, and Wyoming.
In 2010, Michigan’s economy was reeling. The Great Recession had hit the state hard and U.S. automakers were struggling to survive. Seeking to ease the pain, state officials authorized tax credits under the Michigan Economic Growth Authority (MEGA) program as part of long-term deals with distressed automakers.
States received a huge boost when President Joe Biden signed a $1.9 trillion relief package on March 11 that provides an extra $195 billion in federal aid to help plug budget shortfalls and repair economies ravaged by the coronavirus pandemic.
After scrambling to close midyear budget gaps, sustain needed services, and help the millions suddenly left jobless nationwide by pandemic shutdowns, state governments now confront additional and urgent decisions. Although conditions are improving, COVID-19 and its impact still top state legislative agendas. The difficult climate this year exacerbates the perennial pressure on state policymakers to focus on immediate crises while pushing complex, ongoing problems into the future.
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.
Taxes make up about half of state government revenue, with two-thirds of states’ total tax dollars coming from levies on personal income and general sales of goods and services. This infographic illustrates the sources of each state’s tax revenue.
