Category Archives: State & Local Finance

The Economic Crisis and Its Impact on State Aging Programs

Source: National Association of State Units on Aging, December 8, 2008

The current economic crisis has many state aging directors grappling with difficult decisions on budget cuts and reductions in services. Not since the late eighties has the economy looked as sluggish. The most challenging times in the economy increase demand for state planning, budgeting, and monitoring for services that are delivered at the community level on everything from providing assistance with heating bills to providing home delivered meals as well as all types of home health supports.

The National Association of State Units on Aging (NASUA) surveyed its members to gauge the impact of the economic downturn on aging services. The members of NASUA are the nation’s 56 officially designated state and territorial agencies on aging, often referred to as State Units on Aging (SUAs). This is the second survey on the economy that NASUA completed in 2008. The first survey was conducted in June 2008. The most recent and more extensive survey was conducted in November. Forty-four states and the District of Columbia responded to the survey.


Source: Nicholas Johnson, Elizabeth Hudgins, and Jeremy Koulish, Center on Budget and Policy Priorities, December 23, 2008

Twenty-seven states have cut education because they face massive, devastating budget deficits in this recession.

The combination of rising unemployment, declining consumer spending, declining asset values, and foreclosures has led to declining state revenues. And the number of people in poverty is growing, adding costs to state budgets for programs such as Medicaid and social services.

Financial Crisis Shouldered by City Workers

Source: Paul Abowd, Labor Notes, No. 358, January 2009

Last summer’s meeting of the National Conference of Mayors foresaw grim days for American cities — and that was before finance markets folded up in the fall. Now urban governments confront budget deficits that stem from falling tax revenues and the ongoing credit crunch.

More than a quarter of American cities hemorrhaged jobs in 2008. Mayors now propose to add to the jobless by firing yet more city workers. Wall Street’s collapse has opened a $4 billion hole in New York’s $60 billion balance sheet over the next two years–and support from state and federal coffers is less than forthcoming.

Green Infrastructure Municipal Handbook

Source: Environmental Protection Agency, December 19, 2008

The Municipal Handbook is a series of documents to help local officials implement green infrastructure in their communities. Handbook topics cover issues such as financing, operation and maintenance, incentives, designs, codes & ordinances, and a variety of other subjects. The handbook documents are intended to serve as “how to” manuals on these topics, written primarily from the standpoint of municipal implementation. The handbook is being produced in sections, with each new element being released as it is completed.
Currently available:
Funding Options
Green Streets
Retrofit Policies
Rainwater Harvesting Policies

Estimating State and Local Government Pension and Retiree Health Care Liabilities

Source: Stephen T. McElhaney, Pension Resarch Council, WP2008-22, October 2008
(registration required)

Liabilities for pension and retiree health-care benefits provided by U.S. state and local governments are causing concerns for taxpayers and for those holding government bonds. Many question whether the methodology used to calculate these liabilities is appropriate, since the private sector calculates retirement system liabilities using different methods and assumptions. This chapter reviews and critiques current actuarial and accounting standards under which governmental retiree liabilities are calculated and compares and contrasts these standards to those used by private-sector employers.

Fiscal Survey of the States Fall 2008

Source: National Governors Association and the National Association of State Budget Officers, December 2008

Findings of this edition of the Fiscal Survey of States include the following:

  • Overall, state spending growth slowed for most states during fiscal 2008, and is forecasted to slow even further and turn negative during fiscal 2009.
  • In fiscal 2008, 13 states reduced their enacted budgets, by $3.6 billion. So far in fiscal 2009, 22 states have cut their enacted budget by $12.1 billion, with another five forecasting cuts. Additionally, 31 states have reported budget gaps totaling $29.7 billion for fiscal 2009 since budget enactment.
  • Six states reported negative budget growth for fiscal 2008, while 18 states enacted negative growth budgets for fiscal 2009.
  • Eight states enacted increases to their fiscal 2009 cash assistance levels under the Temporary Assistance for Needy Families (TANF) program, ranging from 1.6 percent to 30 percent. One state enacted a decrease of 2.2 percent in cash assistance under the TANF program.


Source: Governing Magazine/November 2008

States and localities are experiencing shortfalls in all three of their major revenue sources. No tax is safe. The housing crisis will depress property tax collections. Job losses and the stock-market meltdown will take a toll on income taxes. As for sales taxes, shoppers are staying home–mall traffic fell by an average of 10.5 percent the last two weeks in September.

Budget Processes in the States, Summer 2008

Source: National Association of State Budget Officers, 2008

The budget process is the arena in which a state determines public priorities by allocating financial resources among competing claims. The process used to develop the state budget has important implications on the final outcome. The authorities and restrictions on budget players influence each state’s ability to achieve policy and funding objectives within the budget. Budget Processes in the States highlights key budget issues, demonstrating the diversity in state budgeting practices.

Budget Processes in the States is divided into five chapters. The chapters are organized around particular topical areas: the budget cycle, budget requirements, budgeting tools, the budget document, and monitoring the budget. Each chapter begins with a brief summary of the tables.

This publication is updated periodically in an effort to keep abreast of changes states make in their budget processes and differences in how they implement and interpret budgeting conventions over time. Data for this report were collected from the fifty states during fiscal 2008. This edition of the report updates the 2002 edition.

Local Pension Plans As Well Funded As States’, According To Report

Source: American City & County, November 21, 2008

Locally administered pension plans are as well funded as state plans and have better track records for making their Annual Required Contributions (ARCs), according to the Washington-based Center for State and Local Government Excellence’s (CSLGE) eighth issue brief on retirement plans, released in October.

State Budget Troubles Worsen

Source: Elizabeth McNichol and Iris J. Lav, Center on Budget and Policy Priorities, November 12, 2008

From the summary:
States are facing a great fiscal crisis. At least 41 states faced or are facing shortfalls in their budgets for this and/or next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps have opened up in the budgets of at least 31 states plus the District of Columbia just four months after they struggled to close the largest budget shortfalls seen since the recession of 2001. And these problems are expected to continue into next year.