Fiscal Outlook

A quick read of the headlines might lead one to think that state governments are headed the way of Lehman Brothers. However, a closer look at the tough decisions being made in state capitals across the country shows that governors and state legislators are confronting a historic state budget crisis head on. States know that there will be no more bailouts and are making the hard choices today on spending and taxes that Washington tends to ignore.

In a sign of fiscal times for distressed local governments, talk of municipal bankruptcy has picked up in parts of the Midwest and across the country.

While fiscal concerns usually top the list of important issues for states—even in good economic times—over the next few years, the dialogue among state policymakers will almost exclusively be on the topic of money: budgets, federal assistance, taxes, spending, borrowing and, ultimately, surviving.

This report summarizes the meeting of the Fiscal Affairs Roundtable at the 2010 CSG National Conference in Providence, Rhode Island.  Issues discussed include a fiscal outlook for 2011, unemployment insurance, public pensions, and federal financial reform.

E-newsletter Issue #62/January 6, 2011

As states are pulling out of the Great Recession, they face a multitude of challenges—creating jobs, addressing poverty, repaying the federal government loans from the unemployment insurance trust funds and, generally, doing more with less money.

Fiscal challenges are the Hot Topic of the January/February issue of Capitol Ideas, the bimonthly magazine of...

It’s no secret that the national debt continues to balloon. At nearly $14 trillion, the debt will only increase without substantial action, former U.S. Sen. Alan Simpson and former White House Chief of Staff Erskine Bowles, the co-chairs of the National Commission on Fiscal Responsibility and Reform, say. Their report predicts the debt will more than triple by 2035.

Policymakers across the country are facing one of the most challenging sessions in decades, due in large part to the economic woes caused by the Great Recession. From health care reform to the end of funding from the American Recovery and Reinvestment Act, here are some of the top issues facing legislators this year according to the policy staff at The Council of State Governments.

The advice Puerto Rico Gov. Luis Fortuño gave to policymakers about how to deal with the lingering budget crisis states are facing is similar to what one might say to a toddler trying to remove a bandage from a skinned knee.

“… Do it quickly, swiftly and go as far as you need to go in year one,” he said during Sunday’s lunch session, “Preview 2011: What’s Ahead for State Government.” “Don’t stretch this pain. Just do it as quickly as you can.”

Fortuño is no stranger to fiscal pain. When he took office in 2008, he...

The economy is starting to pick up again, but state policymakers shouldn’t get too excited.

“We can all kind of feel the economy is starting to pick back up again,” said Peter Marino, fiscal adviser to the Rhode Island Senate. “I would describe it as a vulnerable recovery.”

Great nations can come crashing down in just one generation—not thousands of years as conventional wisdom dictates. That’s according to David Gergen, senior political analyst for CNN and professor at the John F. Kennedy School of Government where he is also director of its Center for Public Leadership.

“We’re into that caution light that is blinking at us saying, ‘watch out guys, we’re in serious trouble,’” Gergen said of America’s financial standing at Sunday’s opening session at The Council of State Governments 2010...