State and Local

State and Local

Research

Robert Krol | May 05, 2016
Economist Robert Krol examines the problem of highway congestion, looking at how congestion pricing has been successful in the past and why it could be an attractive option in the future. There is mixed evidence about whether congestion pricing is regressive, but governments implementing congestion pricing could use several policy solutions to help reduce inequity. These include reducing other regressive taxes such as the gasoline tax and giving commuters the option to choose between toll lanes and toll-free lanes.
Marc Joffe, Jesse Martinez | Apr 12, 2016
Puerto Rico is facing a severe fiscal crisis, and new crises will be almost inevitable in the absence of major institutional changes in the commonwealth. History has bequeathed the island inefficient state-run enterprises and a government unable to balance its budget, but Puerto Rico could have a bright future if it undertakes the right reforms.
John A. Dove, Daniel J. Smith | Mar 22, 2016
Alabama currently lags behind its regional neighbors and the nation in economic growth and performance. This study undertakes a comprehensive analysis of Alabama's current fiscal situation as well as the reforms necessary to put Alabama on the road to economic prosperity.
Thomas Stratmann, Christopher Koopman | Feb 18, 2016
We examine the effect of entry regulation on ambulatory surgical centers and community hospitals and find that there are both more rural hospitals and more rural ambulatory surgical centers per capita in states without a certificate-of-need program regulating the opening of an ambulatory surgical center. This finding indicates that certificate-of-need laws may not be protecting access to rural health care, but are instead correlated with decreases in rural access.
Jason Sorens | Feb 09, 2016
When local governments in the United States and other developed nations become more dependent on the central government’s grants, they tend to become less efficient, spending more and taxing more for the same level of services. Voters can also find it difficult to understand which level of government is responsible for which policy.
Edward J. Timmons | Jan 26, 2016
Increasing licensing requirements for healthcare professionals is often promoted as a measure to improve the quality of care, but its main effect may be to raise costs for patients.

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

J. W. Verret, Marc Joffe | Apr 28, 2016
J. W. Verret and Marc Joffe debate whether Puerto Rico should be allowed to restructure its debt. After 10 years of recession and poor fiscal management, Puerto Rico is facing a major fiscal crisis. With $72 billion in debt (the equivalent of the commonwealth’s entire economy), deeply distressed pensions, high unemployment, and outmigration, Puerto Rico is insolvent. Congress is deliberating on legislation to provide a framework for Puerto Rico to restructure its finances under the guidance of a federal control board. The most contested point in the current proposal is whether to allow the board broad authority to restructure debt.
Matthew Mitchell, Olivia Gonzalez | Apr 19, 2016
Over the past six decades, state and local government spending has increased at more than twice the rate of private sector growth. Left unchecked, this growth puts state and local governments on a costly path that is unsustainable. Either spending growth must slow, taxes must rise, or both. Spending growth can contribute to significant fiscal stress, requiring difficult adjustments when large budget gaps arise. Unfortunately, short-term thinking often dominates the adjustment process so that legislators frequently make choices—such as underfunding pension obligations—that improve the short-term fiscal outlook at the expense of worsening the long-term outlook.
Adam Millsap, Olivia Gonzalez | Jan 12, 2016
As state tax systems grow increasingly complex, it helps to have a framework for evaluating their structure. States usually implement taxes that fall into one of three categories—income, property, and consumption—but there is substantial variation in how each of these taxes can be structured. When trying to balance the many competing goals for setting tax policy, state policymakers can use five main criteria to compare the benefits and drawbacks of potential tax instruments: economic efficiency, equity, transparency, collectability, and revenue production.
Eileen Norcross, Emily Washington | Jan 13, 2015
Guaranteed pension benefits are a key feature of government employment for many state and local workers. However, flawed accounting methods have resulted in persistent underfunding of these promised benefits.
| Sep 24, 2013
The Mercatus State Policy Guide is intended to summarize and condense the best research available on the most relevant topics. It’s a starting point for discussion, not a comprehensive overview of economic policy. Each statement is supported by academic research, with links provided in the endnotes. Mercatus scholars are available to further explain the results of their studies. We hope the guide will prove to be a valuable tool in your economic policy research.
Emily Washington | Dec 20, 2011
Several public policy organizations have published studies that rank state economic competitiveness. This piece looks at the overlap between three indices and draws lessons for state policymakers.

Speeches & Presentations

Expert Commentary

Apr 28, 2016

The commonwealth of Kentucky is famous for many great things: fried chicken, a major horse race and baseball equipment, to name a few. Unfortunately for the citizens of the Bluegrass State, it is also the only state that does not allow physician assistants to prescribe controlled substances.
Apr 27, 2016

This month, Detroit’s operating agreements with Uber and Lyft will end, placing ride-sharing in the Motor City in legal limbo. Over the last two years, 32 states have passed ride-sharing laws and another 15 are currently considering legislation, including Michigan.
Apr 20, 2016

Before more federal dollars are distributed to cities local officials should be required to cut costs, even if doing so is politically uncomfortable, and public-transit privatization is a way to do that.
Apr 13, 2016

The usual policies of tax expenditures, subsidies and other government handouts to businesses are generally ineffective at spurring economic growth, so states have little to lose by foregoing such strategies and focusing on simplicity and stability when it comes to economic policy.
Apr 11, 2016

Before going on a two-week recess, the House Committee on Natural Resources published a discussion draft of a new proposal to deal with Puerto Rico’s debt crisis, known as the Puerto Rico Oversight, Management, and Economic Stability Act.
Mar 24, 2016

Without another major economic shift, people and companies are not going to move from San Diego, Phoenix, and Miami back to Cleveland, Buffalo, and Detroit in large numbers. Moving toward opportunity is a better solution for most Americans than waiting for opportunity to come to them, and they deserve to be told the truth.

Charts

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.

Experts

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.

Podcasts

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.

Books

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 Philly.com.
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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