Recently in State & Local Finance Category

Source: Child Trends, February 24, 2010

From the press release:
Child Trends, with support from Casey Family Programs, launches the State Child Welfare Policy Database to provide information on child welfare laws, procedures, and agency guidance for all 50 states and the District of Columbia. The Database can help elected officials, administrators, advocates, practitioners, researchers, and other stakeholders keep up to date with the policies that protect our nation's most vulnerable children.

The site can be navigated by state or by topic. You can learn about your state's expenditures on child welfare services, policies for relatives and "kin" caring for children involved in the child welfare system, benefits and services provided to foster youth after age 18, and much more. In addition to the traditional web version, the site is designed to be compatible with your mobile device, allowing for easily accessible information on the go.

Source: Campaign for Tobacco-Free Kids, American Cancer Society Cancer Action Network, American Heart Association, American Lung Association and Robert Wood Johnson Foundation, February 10, 2010

From the summary:
By increasing cigarette taxes by $1 per pack, the states could raise more than $9 billion in new annual revenue to help close severe budget shortfalls, while also reducing smoking and saving lives, according to a new report released today by a coalition of public health organizations.

A national poll released along with the report finds that 67 percent of voters support a $1 tobacco tax increase. The poll also found that voters far prefer higher tobacco taxes to other options, such as other tax increases or budget cuts, for addressing state budget deficits.

The report details the revenue and health benefits to each state of increasing its cigarette tax by $1 per pack. If every state and Washington, D.C., did so, they would:

* Raise $9.1 billion in new annual revenue;
* Prevent more than 2.3 million kids from becoming smokers;
* Prompt more than 1.2 million adult smokers to quit;
* Prevent more than 1 million premature, smoking-caused deaths; and
* Save $52.8 billion in health care costs.

Source: Olga Pierce and Jeff Larson, ProPublica, 2010

The unemployment insurance system is in crisis due to a combination skyrocketing unemployment and - in some cases - poor planning. A record 20 million Americans collected unemployment benefits last year, and twenty-six states have run out of funds and been forced to borrow from the federal government, raise taxes, or cut benefits. In many other states the situation is deteriorating fast. Using near real-time data on state revenues and the benefits they pay out, we estimate how long state trust funds will hold up. Click on a state to find the latest, plus historical data, and details on tax increases and benefit cuts. Updated weekly.

Source: Iris J. Lav, Center on Budget and Policy Priorities, February 16, 2010

From the summary:
As states head into their third year of fiscal crisis most continue to face severe revenue shortfalls that require closing huge deficits. [1] As states prepare and consider budgets for the fiscal year that begins July 1, 2010 in most states, the choices they make about how to close those deficits have serious implications both in the short and long term. States that rely solely or primarily on widespread budget cuts to close deficits are harming residents and businesses that need immediate assistance; they also are reducing demand in the economy and impeding their state's economic recovery.

Source: Pew Center on the States, 2010

From the summary:
The nation finally may be clawing out of the longest recession since the 1930s. But states still are groping to find the bottom of a fiscal crisis prolonged by historic revenue drops, eye-popping budget deficits, double-digit unemployment in more than a dozen states and rising demands for social services.

In State of the States 2010, the Pew Center on the States looks beyond the acute problems caused by the Great Recession to examine larger trends that have the potential to change state government in lasting ways.

Both policy makers and voters will make key choices this year that will help determine the shape of state government in this new decade and beyond. The latest in a series of annual publications, State of the States 2010 can help inform those choices with its nonpartisan, analytical look at the recession's effects on policy and politics in the 50 states.

Source: Christina D. Romer and David H. Romer, Brookings Papers on Economic Activity, Spring 2009

From the abstract:
The hypothesis that decreases in taxes reduce future government spending is often cited as a reason for cutting taxes. However, because taxes change for many reasons, examinations of the relationship between overall measures of taxation and subsequent spending are plagued by problems of reverse causation and omitted variable bias. To derive more reliable estimates, this paper examines the behavior of government expenditure following legislated tax changes that narrative sources suggest are largely uncorrelated with other factors affecting spending. The results provide no support for the hypothesis that tax cuts restrain government spending; indeed, the point estimates suggest that tax cuts increase spending. The results also indicate that the main effect of tax cuts on the government budget is to induce subsequent legislated tax increases. Examination of four episodes of major tax cuts reinforces these conclusions.

Source: Center for State and Local Government Excellence, January 2010

From the summary:
Hiring freezes, pay freezes, layoffs, and furloughs top the list of ways that local and state governments are cutting costs, according to a Center for Excellence online survey of government managers.

States and local governments also have made significant changes in their benefit offerings.

Source: Michael Keating, American City & County, February 1, 2010

According to the 2010 Keating Report on government budgets and spending, state and local governments are in for another rough year. The 2010 Keating Report includes analysis of federal, state, and local government spending, as well as an in-depth look at construction and security spending by governments.

Source: Larry Anderson, GovPro, December 1, 2009

The economy is looking up, but governments will be feeling the recession's effects throughout 2010.

Economic growth of 3.5 percent in the third quarter of 2009 may mark the end of the Great Recession, but state and local governments will likely feel ongoing negative effects throughout 2010 and beyond. Unemployment rates near double digits will continue through the next year, and governments will continue to endure the collateral effects of weak tax revenues, lower property values, slower consumer spending and other negative economic factors. But for the infusion of federal stimulus money, it would be a lot worse.

Source: American Prospect, Vol. 21 no. 2, March 2010

Articles include:
State Fiscal Gimmicks: A Budgetary Balancing Act
Katherine Barrett and Richard Greene
Phony budget accounting defers the day of reckoning -- but raises costs.

Transparency For What?
Mark Schmitt
From our March issue:
The left, right, and center agree that they want more state budget data. But not all data improves policy.

Reform Amid Fiscal Ruin
Greg Anrig
In some states, progressive leadership and grass-roots activism have turned crisis into opportunity for long-deferred tax reform.

A Tour of Six States
Jake Blumgart, Pema Levy, Gabriel Arana and Mikhail Zinshteyn
Snapshots of the fiscal crisis across the nation.

Public Capacity and Public Trust
Dianne Stewart and Michael Lipsky
Can we reverse the vicious circle of frustrated citizens denying state government adequate resources -- and then resenting the lack of state services?

Loosening Fiscal Straitjackets
Iris Lav and Jon Shure
Proponents say that caps on taxing and spending enhance democracy. In reality, they destroy accountable government -- but that can be changed.

Digging Out, Planning Ahead
Nicholas Johnson and Michael Leachman
The federal government needs to do more to help states survive this downturn -- and plan for permanent anti-recession fiscal relief.

California in Crisis
Donald Cohen and Peter Dreier
With a dysfunctional state government unable to act, the universities, schools, and roads that were once the model for the nation are crumbling -- if not collapsing.

Buckeye Budget Blues
Amy Hanauer
Ohio has all the reform elements in place -- except political will.