Natural resource extraction is a key component of many Western states’ economies and often generates a sizeable share of state revenue. However, natural resources are finite, the price of energy commodities is increasingly unpredictable, and revenues are volatile and tough for state forecasters to accurately predict. As a result, many states have created severance tax-based sovereign wealth funds to set aside a share of today’s revenue in order to generate investment earnings for state use in the future. This free CSG eCademy features Patrick Murray of The Pew Charitable Trusts, who presents findings and policy recommendations from a new research brief, including challenges and opportunities for state policymakers in energy-producing states.

States expanded allowable gambling options significantly in the past two decades, particularly in the wake of the Great Recession when more than a dozen states authorized new options in an effort to generate more revenues. Despite these expansions, state and local government gambling revenues have softened significantly in recent years. History shows that in the long run growth in state revenues from gambling activities slows or even reverses and declines. Therefore, states considering further expansions of gambling should take into consideration market competition within the state and among neighboring states.

CSG Midwest
Lawmakers in two Midwestern states have given close scrutiny in recent months to a targeted tax credit that has become an increasingly popular policy tool for trying to help entrepreneurs and startup companies. Known as “angel investor” tax credits, these incentives encourage investment in early-stage firms by mitigating some of the potential loss if a company fails. Most states in the Midwest have some form of this tax credit.

An internet retailer has filed suit against Alabama claiming its new rule requiring all retailers who sell more than $250,000 in goods annually must collect sales tax—regardless of whether the retailer has a physical presence in the state—is unconstitutional.

This lawsuit is the second of its kind. Earlier this spring a lawsuit was filed against South Dakota challenging its law, which is similar to Alabama’s rule.

Last March, U.S. Supreme Court Justice Anthony Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this court to re-examine Quill.”

CSG Director of Fiscal and Economic Development Policy Jennifer Burnett outlines the top five issues for 2016, including strategic decisions following modest revenue growth, workforce development, public pensions, federal instability, and health care costs. 

Fiscal conditions for states were somewhat mixed in the 2014 fiscal year as state general fund revenue growth declined due to the impact of the federal fiscal cliff, while total state spending growth accelerated due to increased federal Medicaid funds from the Affordable Care Act. The number of states making midyear budget cuts remained low and states maintained stable rainy day fund levels. In the 2015 fiscal year, states are expecting both revenue and spending to grow slowly, but below the historical rate of growth. It is likely that budget proposals for the 2016 fiscal year and beyond will remain mostly cautious with limited spending growth.

CSG South

A vital tool for policymakers across the region, Comparative Data Reports (CDRs) offer a snapshot of conditions on a number of issues. Published annually, the CDRs track a multitude of revenue sources, appropriations levels, and performance measures in Southern states, and provide a useful tool to state government officials and staff. CDRs are available for adult correctional systems, comparative revenues and revenue forecasts, education, Medicaid, and transportation.

CSG South

A vital tool for policymakers across the region, Comparative Data Reports (CDRs) offer a snapshot of conditions on a number of issues. Published annually, the CDRs track a multitude of revenue sources, appropriations levels, and performance measures in Southern states, and provide a useful tool to state government officials and staff. CDRs are available for adult correctional systems, comparative revenues and revenue forecasts, education, Medicaid, and transportation.

Inflation-adjusted gross domestic product grew 1.9 percent in the United States during 2013, which is somewhat lower than long-term expectations for economic growth. Employment rose a relatively healthy 1.6 percent, but nearly 1.2 million fewer people have a job than before the recession. Most analysts expect better GDP growth during 2014 and anticipate employment will finally rise above the pre-recession peak sometime during the second half of 2014. Economic growth will improve because the short-term drag caused by sequestration and the debt ceiling debate has played through the economy, improvements in household balance sheets are allowing solid consumer spending increases, business investment is rising with better business equipment purchases and housing construction is healthier in many regions.

Fiscal conditions for states continued to moderately improve in the 2013 fiscal year. Revenue collections exceeded projections for the vast majority of states and spending from both state funds and federal funds experienced stronger growth in comparison to the 2012 fiscal year. Additionally, the number of states making midyear budget cuts remained low and states have continued to replenish their rainy day funds and reserves. In the 2014 fiscal year, states are expected to have continued positive revenue and spending growth. Revenue and spending growth rates, however, are expected to be slower than last year. States are cautiously optimistic that fiscal conditions will continue to slowly improve in the 2015 fiscal year and beyond, although challenges remain.

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