Economic Downturns: Protecting State and Local Budget Priorities in Challenging Times

States have been hit unevenly, but all face long-term uncertainty

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State governments play a fundamental role in the lives of residents by collecting taxes and using that revenue to pay for schools, transportation, public safety, and other policy priorities. In particularly challenging times, when revenue is volatile and priorities may need to be reassessed, it is important that lawmakers manage budgets effectively to mitigate fiscal stress. Although leaders cannot control many external factors that influence state and local 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 or locality remains fiscally sound.

In this series of publications, experts at Pew explore the limits that states face when preparing for fiscal stress and provides key considerations for leaders making budgetary decisions. The series also details fiscal and economic policy recommendations for managing effectively during unforeseen events (such as the COVID-19 pandemic) and preparing for future uncertainty. 

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Coins
Article

States’ Unfunded Pension Liabilities Persist

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Article

For most states, unfunded pension liabilities are the largest of three major long-term costs weighing on their future finances, ahead of unfunded retiree health care benefits for public employees and outstanding debt.

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6 Questions for Policymakers to Gauge Tax Revenue Volatility

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White Paper

Tax revenue volatility is a main driver of state budget uncertainty. Although states can increase or decrease tax revenue by changing tax policies, the volatility of individual tax streams is driven by a variety of factors. These include economic factors such as the mix of industry, natural resources, and population, as well as changes to the federal budget and unforeseen events such as natural disasters.

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Little baby crawling on the pink carpet. Home visiting visit parent mother
Issue Brief

How Low Fertility Affects State Budgets

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Issue Brief

When the economy takes a downward turn, couples often temporarily put off having children.1 But in the years following the Great Recession, births never rebounded. Instead, fertility has largely continued to follow a downward trajectory across the country, falling to a record low in 2020.2 State budgets have started to feel the effects of this long-term decline. The future course of fertility represents a key source of fiscal uncertainty for states as smaller working-age populations may eventually threaten tax bases.

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Southern States Gain Residents the Fastest

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Population growth in southern states outpaced all other regions in the second full year of the COVID-19 pandemic. Florida was the fastest-growing state for the first time since the 1950s, expanding by 1.91% between July 2021 and July 2022. Western states also gained residents, but at a much slower pace. Strong population growth can lead to a rosier economic and fiscal landscape as a growing labor force stimulates new economic activity.

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Article

37 Scientists Pioneering the Future of Biomedical Research

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Biomedical researchers are at the heart of nearly every medical advancement. From cutting-edge cancer treatments to breakthrough discoveries about emerging viruses, these scientists use creativity and ingenuity to explore new horizons in human health and medicine. And for nearly 40 years, The Pew Charitable Trusts has supported more than 1,000 early-career researchers committed to this work.

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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.

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Learn the Basics of Broadband from Our Limited Series

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How does broadband internet reach our homes, phones, and tablets? What kind of infrastructure connects us all together? What are the major barriers to broadband access for American communities?