State governments play a fundamental role in the lives of residents by collecting taxes and then using that revenue to pay for schools, transportation, public safety, and many other policy priorities. In particularly challenging times, when revenue is volatile and priorities may need to be reassessed, it is important that lawmakers manage states’ budgets effectively to mitigate fiscal stress. Although leaders cannot control many external factors that influence state fiscal health—such as global economic conditions, federal policies, or demographic changes—they do decide how to react to those events. And these actions can help determine whether a state remains fiscally sound.
In this series of publications, experts at The Pew Charitable Trusts examine how state leaders are reacting to the current fiscal landscape. Each explores the limits that states face when preparing for the next recession and provides key considerations that leaders can keep in mind when making budgetary decisions. It also details fiscal and economic policy recommendations for managing effectively during unforeseen events—such as the COVID-19 outbreak—and preparing for a downturn.