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
Last Updated July 27, 2021
Getty Images

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. 

100 us dollar bill
100 us dollar bill
Article

States Use Cost-Benefit Analysis to Evaluate Tax Incentives

Quick View
Article

Policymakers expect tax incentive evaluations to provide detailed information about how the programs they have enacted affect their states and their residents. Cost-benefit analyses can help evaluators estimate an incentive’s fiscal and economic impact while also considering the degree to which business decisions may have been influenced by the available incentives.

States’ Total Rainy Day Funds Fall for First Time Since Great Recession
States’ Total Rainy Day Funds Fall for First Time Since Great Recession
Article

States' Total Rainy Day Funds Fall

Quick View
Article

The total amount set aside in state rainy day funds fell for the first time since the Great Recession as lawmakers in fiscal year 2020 filled budget gaps driven by the pandemic’s early fiscal and economic fallout.

State Tax Revenue Passes a Recovery Milestone
State Tax Revenue Passes a Recovery Milestone
Article

State Tax Revenue Passes a Recovery Milestone

Quick View
Article

For the first time since COVID-19 sent state finances into a tailspin, tax revenue has grown enough to erase its initial pandemic losses in a majority of states, and total collections nationwide were poised to do the same.

LAS VEGAS, NEVADA - SEPTEMBER 09: UNLV Department of Criminal Justice chairman and professor Dr. Joel Lieberman teaches Jury Decision Making, a criminal justice class at UNLV, amid the spread of the coronavirus (COVID-19) on September 9, 2020 in Las Vegas, Nevada.
LAS VEGAS, NEVADA - SEPTEMBER 09: UNLV Department of Criminal Justice chairman and professor Dr. Joel Lieberman teaches Jury Decision Making, a criminal justice class at UNLV, amid the spread of the coronavirus (COVID-19) on September 9, 2020 in Las Vegas, Nevada.
Article

American Rescue Plan Dollars Will Stretch by State

Quick View
Article

State governments are beginning to receive the first allocations from $193.5 billion in American Rescue Plan Act (ARPA) funds, which they can deploy for a wide range of uses as they contend with fallout from the COVID-19 pandemic.

OUR WORK

The front facade of the Supreme Court of the United States in Washington, DC.
ian-hutchinson-U8WfiRpsQ7Y-unsplash.jpg_master

Agenda for America

Resources for federal, state, and local decision-makers

Quick View

Data-driven policymaking is not just a tool for finding new solutions for emerging challenges, it makes government more effective and better able to serve the public interest.

Lightbulbs
Lightbulbs

States of Innovation

Data-driven state policy innovations across America

Quick View

Data-driven policymaking is not just a tool for finding new solutions for difficult challenges. When states serve their traditional role as laboratories of innovation, they increase the American people’s confidence that the government they choose—no matter the size—can be effective, responsive, and in the public interest.

fiscal 50
Data Visualization

Fiscal 50

Quick View
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.

News from Stateline