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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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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Report

Tools for Sustainable State Budgeting

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Responsible state fiscal policy requires more than just balancing the current year’s budget. It must also include ensuring that the budget is on a sustainable path. Otherwise, policymakers cannot have the lasting impact they hope for: They may act to improve state services or cut taxes only to have to scale those efforts back later. This risk is especially high in the aftermath of the COVID-19 pandemic. Record budget surpluses, driven largely by federal pandemic aid, empowered states to adopt historically large tax cuts and spending increases from 2021 to 2023, investments that many state leaders hope to build on in coming years.

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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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People walking
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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.

OUR WORK

National Homeownership Month

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37 Researchers Working to Transform Biomedical Science

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Biomedical researchers are on the front lines of scientific innovation. From responding to global pandemics to pioneering lifesaving cancer treatments, these researchers push past scientific boundaries to solve pressing health challenges. For nearly 40 years, The Pew Charitable Trusts has supported more than 1,000 early-career biomedical scientists committed to this discovery.

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Fiscal 50: State Trends and Analysis

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Data Visualization

Fiscal 50 is an interactive platform that provides clear, data-driven portraits of state fiscal conditions. Users can view, sort, and analyze data on key trends that shape states’ fiscal health now and over the long term. Fiscal 50 also features research and analysis to help users understand how these trends interact and fit together—and how they relate to real-time developments playing out in state capitols across the country.

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Learn the Basics of Broadband from Our Limited Series

Sign up for our four-week email course on Broadband Basics

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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?

What Is Antibiotic Resistance—and How Can We Fight It?

Sign up for our four-week email series The Race Against Resistance.

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Antibiotic-resistant bacteria, also known as “superbugs,” are a major threat to modern medicine. But how does resistance work, and what can we do to slow the spread? Read personal stories, expert accounts, and more for the answers to those questions in our four-week email series: Slowing Superbugs.