Budget and Spending

In the mid-1990s, Canada was using $1 out of every $3 to service debt. The Wall Street Journalreferred to its Loonie—the $1 coin—as the Northern Peso. Linda Nazareth, an author and in-house economist for the Business News Network in Canada, said times have changed, in part because the Canadian public bought into the need to turn things around. “I don’t know if that has politically been done in U.S. yet,” Nazareth said during The Council of State Governments’ Eastern Regional Conference earlier this month.

Author David Osborne wrote the core focus of state government is to "educate, medicate and incarcerate." In this new age of austerity, however, the state-federal funding mechanisms that have underpinned these priorities for nearly half a century are beginning to fray.  The Budget Control Act of 2011 may be just one week old, but with the stock market in free-fall, it's going to have to grow up fast. Washington pundits are tripping over themselves to handicap the deliberations of the newly formed "supercommittee" and pouring through vintage 1980s news articles to learn how the Gramm-Rudman inspired "sequestration" process may play out.  

Since 1935, The Book of the States has been the resource for state information for state leaders. Today—perhaps more than ever—access to up-to-date and reliable data and information is a key ingredient to developing successful state strategies and evidence-based solutions to the tough challenges policy leaders face.

Now, policymakers have a new tool: The Book of the States Regional Analysis Series.

As President Obama and Congressional leaders continue to battle over the federal budget, namely what government programs to cut and what taxes to increase, a new computer game gives you the chance to set spending priorities for the federal government.   Players of Budget Hero quickly discover how difficult it is to achieve their policy objectives while keeping the government from going broke.

Chapter 2 of the 2011 Book of the States contains the following articles and tables:

Chapter 7 of the 2011 Book of the States contains the following articles and tables:

State governments play an important role in national and regional economic conditions and are subject to prevailing economic conditions. The Census Bureau’s official statistics provide a full picture of the early impact of the most recent recession from tax revenues to expenditures to employment.

The state fiscal environment remains very weak despite the turnaround in revenue growth. It  will be at least several years before many states see revenues return to their previous peak levels and several years more before revenues reach similar proportions of the economy. Though states may be less inclined to seek the tax rate increases that occurred after previous recessions, many are examining ways to tax cross-border activity more effectively.

State treasurers provide professional financial management and accountability for a variety of public funds. These include general operating funds and special funds such as unclaimed property programs. They also borrow money through the municipal debt market to finance state projects.

The 2010 fiscal year was another difficult year for states. State revenue collections continued to fall, while general fund spending declined for the second year in a row, marking the first time state spending has declined in back-to-back years. Additionally, 39 states were forced to make midyear budget cuts. Fiscal conditions have improved somewhat for states thus far in the 2011 fiscal year. The number of states making budget cuts has declined and both revenue collections and spending have grown. However, states remain well below pre-recession levels even with the recent increases. States will have to continue to make difficult decisions in the 2012 fiscal year and beyond as Recovery Act funds wind down, spending demands remain high and revenues are slow to recover.