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.
The federal government is heaping new challenges on state lawmakers as they begin this year’s legislative sessions amid persistent pressure from weak revenue growth and rising long-term costs.
State Strategies to Help Businesses Launch and Expand
State governments can undermine opportunities for investment and job creation when businesses spend too much time or money on inefficient regulatory processes, or when new business projects get delayed because firms don’t understand how to comply with the rules. To address this challenge, state policymakers can focus on two types of reforms.
Many states ended 2017 flush with unexpected cash. Federal legislation that caps some tax deductions beginning in 2018 prompted many Americans to prepay their state and local taxes. While this surprise revenue was positive news for state budgets, several policymakers struck a cautious tone.
When Kansas lawmakers found themselves facing a projected $900 million budget shortfall in 2017, then- Governor Sam Brownback (R) proposed tax hikes on cigarettes and liquor, among other measures—which would have been the state’s second cigarette tax increase in three years. But legislators on both sides of the aisle decided the measures, projected to raise $377 million over two years, did not do enough to address the state’s structural budget problems. The Legislature rejected the proposal, instead passing a budget that included over $1 billion in income tax increases directed at improving the state’s longer-term fiscal outlook.
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 and federal funds together account for 80.9 percent of revenue for the 50 states. Taxes are the largest revenue source in 45 states, while federal funds are greatest in five: Alaska, Louisiana, Mississippi, New Mexico, and Wyoming. This infographic displays a breakdown of each state’s revenue, by major categories.
Taxes make up almost half of state government revenue, with the bulk coming from levies on personal income and general sales of goods and services. This infographic illustrates the sources of each state’s tax revenue, showing percentages for the two largest streams.
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