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

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

Economic Downturns: Protecting State and Local Budgets
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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. 

Coins
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.

White Paper

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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Passengers boarding Metro train
Article

Increases in Remote Work Could Hurt Some Cities' Revenues

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Article

Changes in how Americans work, made in response to the COVID-19 pandemic, could have long-lasting implications on tax revenues in cities with significant numbers of commuters.

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People walking
Article

A Third of States Lost Population in 2021

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Article

The pace of population growth nationally was five times slower in 2021 than over the preceding 10-year period. Population in 17 states declined last year, including Illinois, Mississippi, and West Virginia—the same three states that lost residents during the 2010-20 decade. Although population growth had been gradually slowing before COVID-19, the pandemic exacerbated this long-term trend.

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fiscal 50
Data Visualization

Fiscal 50

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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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