Budgets

Budgets

Research

Stephen Miller, Zachary Gochenour | Jan 19, 2016
A new study written for the Mercatus Center at George Mason University analyzes North Carolina’s performance on key issues, the way in which the state government manages itself, and opportunities for improvement. North Carolina has recently implemented proactive reforms to its tax system, indicating that state lawmakers are capable of executing the other positive policy changes outlined in this study.
Erick M. Elder | Jan 06, 2016
Rainy day funds are one tool that most US states use to help mitigate the fiscal stress caused by economic slowdowns that reduce state government revenue. Past research I did with Gary Wagner uses a switching regression to estimate parameters in order to form a distribution of potential budget shortfalls for each state. This paper updates those results to include post–Great Recession data. A comparison of this distribution to the actual amount of savings that states have accumulated allows an assessment of how prepared each state is for an economic downturn and the resulting decline in tax revenues. What ability do states have to weather economic downturns without raising taxes or reducing spending? States are ranked based on their current ability to weather future economic downturns.
Susan P. Convery, Andrew J. Imdieke | Nov 05, 2015
A new study for the Mercatus Center at George Mason University examines how government financial statements that follow generally accepted accounting principles provide useful information to decision makers. Local government decision makers should learn how to use this information to design stronger governments that avoid fiscal distress.
Robert Krol | Jul 14, 2015
A new paper for the Mercatus Center at George Mason University gathers and analyzes economic research on transportation benefit-cost analysis and the voting behavior of politicians, and concludes that current transportation infrastructure spending policies lead to inefficient decisions and are often driven by political forces.
Matthew Mitchell, Pavel A. Yakovlev | May 13, 2015
A new study for the Mercatus Center at George Mason University shows that differences in these rules can have significant effects on policy. The study finds that states with separate taxing and spending committees spend less per capita than other states. Voters concerned about the growth of government may want to take a closer look at this phenomenon.
Randall G. Holcombe | Feb 26, 2015
In a comprehensive assessment of Florida’s fiscal policy, Dr. Randall Holcombe of Florida State University examines the state’s education and health care spending, pension system, taxes and budget, land use regulation, homeowners insurance, and many other key policies. To read the entire paper, please download the PDF. To view individual sections by issue, see below.

Testimony & Comments

Research Summaries & Toolkits

Expert Commentary

Jan 28, 2016

Whether your state is relatively prepared or unprepared for the next economic downturn, the good news for taxpayers and for people who rely on government services is that smart policymakers will learn from the past.
By Marc Joffe |
Jan 07, 2016

Puerto Rico's debt crisis — the subject of House hearings later this month — represents a failure of the island's unique commonwealth governing model. It's not a country, not a state, and not a territory. Instead, Puerto Rico is a combination of all three: a largely self-governing island with heavy economic and political dependence on a great power.
Jan 04, 2016

Most Ohioans would probably agree that their state’s finances are managed relatively well. According to Mercatus Center at George Mason University research, which ranks states’ fiscal health, they’re right. Ohio ranks seventh nationwide, and several of the states placed higher have the advantage of massive oil and gas revenue.
Nov 03, 2015

One unpleasant aspect of being an economist is that it sometimes falls on us to explain why a feel-good idea is actually harmful. This includes the “preference policies” used by many U.S. states to assist local businesses, by giving an advantage to in-state vendors who submit bid proposals for state projects. Our new research finds that, despite the support they enjoy on both sides of the political aisle, preference policies may be costing you hundreds of dollars each year.
Sep 01, 2015

How serious was the default by Puerto Rico on its bond obligation? As a member of parliament and associate minister of finance during the recovery in New Zealand during the mid-1980s when the commonwealth almost went bankrupt, I have firsthand knowledge of how difficult recovery is — but I also know that it is possible.
Aug 30, 2015

In a new study based on states' audited financial reports, I rank New Jersey 49th out of 50 states for its fiscal health. Recently, I testified before the state Senate in Harrisburg on Pennsylvania's ranking, which is on a similar path at 41st. Fortunately, it may have time to change course by executing some of the same reforms that would help pull New Jersey out of its tailspin.

Charts

Using data from the Office of Management and Budget (OMB), the following two charts place the post-1960s explosion in federal grants to state and local governments in perspective.

Experts

Podcasts

Dean Stansel | January 27, 2015
Dean Stansel, a research scholar at the Mercatus Center, discusses how contributing to state rainy day funds helps minimize the fiscal stress of budget shortfalls.

Recent Events

Mercatus Center budget scholars will share their academic research and practical knowledge with local thought leaders in a half-day seminar hosted by the Bluegrass Institute in Lexington, Kentucky.

Media Clippings

Eileen Norcross | Feb 02, 2014
Eileen Norcross cited at The New York Times.
Sarah Arnett | Jan 17, 2014
The Mercatus Center cited at Philly.com.
Sarah Arnett | Jan 16, 2014
The Mercatus Center cited at Investor's Business Daily.
| Jan 16, 2014
Mercatus cited at Union Leader.
Eileen Norcross, Matthew Mitchell, | Jul 23, 2013
Detroit reports an unfunded pension liability of $634 million, but using more accurate accounting methods it's closer to $3.5 billion.
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