The fiscal skies are clearing, but states still have some tough decisions to make.

Experts shared strategies states can use to improve their standing in a number of areas, including rainy day reserves, pensions and international trade, during Sunday’s session, Fiscal and Economic Outlook for 2015.

According to Mary Murphy of the Pew Charitable Trusts, state shortfalls outstripped savings nearly two-to-one during the Great Recession. Post-recession, however, state tax revenues are showing overall improvement.

Smuggled tobacco comes with many challenges and costs, and it’s not just lost tax dollars for states, speakers at the session, “Smuggled Tobacco: Straining States’ Bottom Lines,” said Sunday.

“The amount of money that become involved is enormous,” said G. Stewart Petoe, director of legal affairs for the Virginia State Crime Commission. “You make absolute fortunes trafficking black market cigarettes.”

As one dealer noted in a recording...

For every two packs of cigarettes sold in New York, at least one has been illegally smuggled into the state. That’s according to research by the Mackinac Center for Public Policy, which also reports that cigarette smuggling cost states an estimated $5.5 billion in lost revenue in 2012. “The significance of the problem cannot be overstated in high-tax states,” said Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center.

Economic recovery from the Great Recession has been slow and painful and for many states, revenues are only now getting back to pre-recession levels. While the recession took states on a fiscal roller coaster ride, it also helped reveal the importance of planning for hard times long before they arrive and having a strategy in place to manage volatility. A new series of reports by The Pew Charitable Trusts aims to provide state policymakers with a roadmap to help manage fiscal ups and downs and uncertainty. The first report in the series, "Managing Uncertainty," looks at volatility across the 50 states, noting that the drivers of economic and revenue volatility vary widely.

Cigarette smuggling across state lines is a serious problem, costing states billions in lost revenue each year and creating challenges for law enforcement. 

U.S. libraries have taken a major hit during the recent recession. Fighting to have their voices heard among those other important issues, including education and health care, libraries have been losing the funding battle.

The Council of State Governments Medicaid Policy Academy in Washington, D.C., June 18-20 provided attendees with important information about the many facets of the Medicaid program. Speakers at the sessions offered information beyond the sessions in video interviews.

Medicaid Role in State Budgets

Robin Rudowitz, associate director, Kaiser Commission on Medicaid and the Uninsured, says Medicaid has a complicated role in state budgets.

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A recent report by the Center on Budget and Policy Priorities (CBPP) revealed that education is still feeling the economic sting of the recession. State budgets reflect per pupil expenditures in 35 states are lower than in 2007-2008 when adjusted for inflation, and 14 states have effectively cut funding per student by over 10 percent in the last six years. 

Taxpayers X and Y live in the same state and have the same income but Taxpayer X earns all of her income in-state while Taxpayer Y earns all of her income out-of-state.  Taxpayer Y pays more in taxes because she pays income taxes out-of-state and pays a county income tax in her home state.  Unfair?  (Not necessarily.  After all, Taxpayer Y receives government services in the county where she resides.)  Unconstitutional?  The Supreme Court will decide.    

In...

Full effects of the United States’ Standard and Poor’s (S&P) credit downgrade in 2011 are yet to be fully known, especially for state governments. The map below looks at the S&P’s state credit ratings for each of the 50 states.

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