State and Local

State and Local


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.
Sanford Ikeda, Emily Washington | Nov 04, 2015
A new study for the Mercatus Center at George Mason University reviews the empirical literature on the effects of land-use regulations. The study finds that these regulations reduce the sup- ply of housing relative to what it would likely be in a free market and ultimately increase housing costs for consumers. Because lower-income households spend on average a larger percentage of their income on housing than higher-income households, the costs of these regulations disproportionately burden low-income households. Restraining the growth of land-use restrictions and rolling them back would benefit not only low- and middle-income households, but also overall economic growth.
Marc Joffe | Sep 17, 2015
In a new study for the Mercatus Center at George Mason University, policy analyst Marc D. Joffe examines state financial data to better understand the effects these trends in Medicaid are having on state budgets. The study finds evidence that growth in state Medicaid spending is crowding out spending on other major state programs, most notably education and transportation infrastructure. However, there is little evidence that growing state Medicaid expenditure is increasing state debt burdens. As the ACA continues to drive increasing enrollment in all states, those states that have opted for the Medicaid expansion will experience a greater fiscal burden as federal assistance for the expansion gradually shrinks.
Adam Millsap | Sep 03, 2015
A new study for the Mercatus Center at George Mason University examines the RACP and finds that while the grant program does generate some employment at the county level, the gross effect is small and the net effect is actually closer to zero because money distributed to some counties is transferred from other Pennsylvania counties, either through fewer grants or higher taxes that fund the bonds.
Justin M. Ross, Olivia Gonzalez | Aug 11, 2015
Taxpayers and policymakers alike are drawing attention to opaque tax practices at the local level. Recent evidence suggests that local officials have the incentive to raise extra revenue through less transparent means and are channeling this revenue into assets for future spending. States have an opportunity to make their tax structure more transparent by adjusting tax rates following property reassessments and making the calculation of their property taxes clearer.
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.

Testimony & Comments

Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | Jun 12, 2015
There is little evidence to support the claim that certificates of need are an effective cost-control measure; and Stratmann and Russ have found that these programs have no effect on the level of charity care provided to the poor. While controlling health care costs and increasing care for the poor may be laudable public policy goals, the evidence strongly suggests that CON regulations are not an effective mechanism for achieving them. Instead, these programs simply decrease the supply and availability of health care services by limiting entry and competition.
Eileen Norcross | Jun 11, 2015
In this brief comment, I will focus on the correct framework to use in selecting the appropriate interest rate when valuing public pension sector liabilities. A framework based on economic principles will accurately measure the market value of these liabilities and is superior to the actuarial approach.
James Broughel | Sep 02, 2014
This year’s report makes several important improvements over reports from previous years. However, there are still a number of ways in which this report can be made more useful if it is to be a meaningful representation to Congress and the American public of the effects of the regulatory system in the United States.
Matthew Mitchell | Oct 04, 2011
Matthew Mitchell testified before the House Committee on the Judiciary about state governments' experiences with Balanced Budget Amendments.
Russell Roberts | Feb 16, 2011
Russell Roberts testified before the House Committee on Government Oversight and Reform on the second anniversary of the stimulus.
Eileen Norcross | Feb 09, 2011
Eileen Norcross testified before the U.S. House Committee on Oversight and Government Reform on the looming municipal debt crisis.

Research Summaries & Toolkits

Speeches & Presentations

Expert Commentary

Nov 17, 2015

The District of Columbia recently filed suit in D.C. Superior Court to use eminent domain to take control of a piece of land the city needs to placate D.C. United, the District's major league soccer team. Without the land, D.C. United may leave for Virginia. This is just another in a growing list of local governments using the policy of eminent domain to enrich other private citizens, rather than for essential public uses. It's a policy only big business or a government bureaucrat could love.
Nov 16, 2015

Officials and activists in cities around the United States are lamenting the lack of affordable housing in their communities. Even the federal government is getting involved, as the Secretary of Housing and Urban Development Julian Castro was recently in Minneapolis to discuss the issue. Most Americans know about the sky-high housing prices in places like San Francisco and New York. But fewer are aware that a similar outcry over housing prices exists in places such as Houston, Denver,Minneapolis-St. Paul, Seattle and Wilmington, N.C., areas not typically known for their high housing prices.
Nov 05, 2015

Housing is becoming increasingly expensive in major American cities, and this is partly due to land-use regulations that don't receive enough attention from policymakers or voters. In a new research paper, Sandy Ikeda and I review the economics literature on the relationship between land-use regulations and housing costs. We find that a significant majority of studies show that stricter zoning rules increase the cost of housing. These higher prices hurt low-income people, reduce income mobility, and even limit national economic growth.
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.
Nov 02, 2015

Any plan for assisting Puerto Rico that doesn’t address the fundamental labor market issues will fail in the long run. Over 200,000 people have left Puerto Rico since 2010, and many of them had college degrees and were in their prime earning years. The Puerto Rican government needs to be encouraged and empowered to implement crucial labor market reforms that expand economic opportunity in the commonwealth. Otherwise talented, ambitious workers will continue to flee the country in droves, further eroding Puerto Rico’s tax base and making it difficult for the government to stay out of debt long term.
Sep 18, 2015

Some states have addressed the problem with what’s known as a “roll-back” rule, where current property tax rates are compared with an adjusted version of the property tax rates that account for the growth in property values. Instead of comparing the 2015 property tax rate to the rate posted in 2014, they recalculate what the rate would have been in 2014 by using the 2015 property values. This transparently gives voters context on the size of the property tax extraction from its base. Perhaps more revenue from property taxes is desirable, but it should be transparent to citizens, without misleading claims that politicians somehow managed to keep taxes flat and increase spending simultaneously.


According to recent research, expanding state Medicaid spending is “crowding out” spending on other major state programs, most notably education and transportation infrastructure. This growth in state Medicaid spending, however, does not seem to be increasing state debt burdens.


Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University, where he is the director of the Project for the Study of American Capitalism. He is also an adjunct professor of economics at Mason. In his writing and research, he specializes in economic freedom and economic growth, public-choice economics, and the economics of government favoritism toward particular businesses.
Eileen Norcross is a senior research fellow at the Mercatus Center at George Mason University. As director for the Mercatus Center’s State and Local Policy Project, she focuses on questions of public finance and how economic institutions support or hamper economic resiliency and civil society. She specializes in fiscal federalism and institutions, state and local governments and finance, pensions, public administration, and economic development.
The Honorable Maurice McTigue, QSO, is vice president for outreach at the Mercatus Center at George Mason University. He is director of the Mercatus Center’s Government Accountability Project and a member of its Spending and Budget Initiative and State and Local Policy Project.
Adam Millsap is a research fellow for the State and Local Policy Project at the Mercatus Center at George Mason University. Adam was also a Mercatus Center Adam Smith Fellow.
Mark J. Warshawsky is a Senior Research Fellow at the Mercatus Center of George Mason University. His research interests include employer-sponsored retirement programs, social security, financial planning, health and long-term care financing, corporate and public finance, and macroeconomics.


Eileen Norcross | October 08, 2015
Eileen Norcross discusses a recent op-ed on the need for transparency surrounding property tax increases in Virginia with Mike Schickman on WSVA.

Recent Events

Join us for a lunchtime discussion as Eileen Norcross explains what policy changes would help Arizona improve its fiscal health.


Michael S. Greve | May 22, 2015
This essay examines the sources and the scope of federalism’s failures. It provides a trenchant, constitutionally grounded analysis with profound implications for a range of current policy debates. Federalism’s restoration requires not merely rebalancing the federal-state relationship through decentralization. Rather, we must restore the structure of federalism to competitive federalism—which encourages states to compete to enhance freedom and economic growth—in response to the rise of cartel federalism, which squashes competition between the states and makes states dependent on the federal government.

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
Sarah Arnett | Jan 16, 2014
The Mercatus Center cited at Investor's Business Daily.
| Jan 16, 2014
Mercatus cited at Union Leader.
Adam Thierer | Oct 08, 2013
Adam Thierer cited at Politico.
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