State and Local

State and Local


Jacob Burgdorf | Sep 15, 2016
States that give brewers more control over their own product consistently have more breweries, and consumers in those states have never had more choices.
David M. Primo | Aug 29, 2016
Most Americans likely know very little about their state’s constitution, yet these documents have significant effects on our day-to-day lives.
Tracy C. Miller, Megan E. Hansen | Aug 23, 2016
The federal role in highway spending is expected to get smaller because fuel tax revenues are decreasing and Congress is holding off on raising the federal gas tax rate. Meanwhile, states are not getting the most out of their highway spending. Traffic congestion plagues urban areas, and simply investing in highways and transit will not be enough to fix the problem. A new study for the Mercatus Center at George Mason University discusses general principles that can help states maximize the value they get from their highway spending. While no two states are identical, policymakers can still learn from one another by observing what works and using the same general principles to create reforms that work for their states.
Daniel Sutter | Jun 21, 2016
Medicaid was established in 1965 as a joint state and federal program to provide medical insurance to Americans who are poor and have disabilities, and it has grown from 1 percent to 3 percent of GDP. The source of Medicaid’s growth over the past 50 years must inform efforts to reform the program and slow spending. The literature on the political economy of Medicaid provides strong evidence of interest group and political ideological influence, enabled by the open-ended federal match for state spending.
Eileen Norcross, Olivia Gonzalez | Jun 01, 2016
A new study for the Mercatus Center at George Mason University ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, such as unfunded pen­sions and healthcare benefits.
George R. Crowley | May 17, 2016
A new study for the Mercatus Center at George Mason University examines recent trends in state fiscal policy and details how well these efforts conform to widely accepted “best practices” in tax reform. It examines the tax and the expenditure patterns of five states and finds that, while there is no one correct way to enact economically beneficial tax reform, it is possible to discern some clear trends.

Testimony & Comments

Christopher Koopman, Michael Farren, Matthew Mitchell | Sep 19, 2016
It is important that the Commission—using this framework as a guide—analyze the impact that barriers to entry, price controls, and mandated business practices may have on (1) continued competition within the taxi and limousine industries, (2) these industries’ ability to compete with other for-hire transportation services like Uber and Lyft, and (3) the capacity of these industries to adapt and change to fit consumer preferences and economic realities.
Christopher Koopman | Mar 16, 2016
Whatever the justification behind licensing in the past, its rationale is disappearing as technology provides new solutions to old problems. This meeting is an opportunity for policymakers to reevaluate traditional regulations aimed at addressing information deficiencies and allow technological innovation to do what regulation could not: improve consumer welfare while encouraging innovation and economic growth.
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.

Research Summaries & Toolkits

James Broughel, Oliver Sherouse | Sep 13, 2016
Federal regulation tends to attract the most headlines. But it is important to remember that the 100 million words and over 1 million restrictions in the CFR are just the tip of the iceberg when it comes to the true scope of regulation in the United States.
James Broughel | Sep 13, 2016
The level of regulation is on the rise, both in Kentucky and in Washington, DC. How to respond to this situation is an important question for policymakers at all levels of government.
Mark J. Warshawsky, Eileen Norcross | Sep 01, 2016
Political sympathy for retirees runs deep on both sides of the aisle, but federal financial intervention in a major pension failure would have a disastrous impact on the federal government’s credit and debt. It would also create a dangerous disincentive for the responsible and prudent administration of pensions at all levels.
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.

Speeches & Presentations

Expert Commentary

Sep 15, 2016

Overall the craft beer renaissance has been a success: In many states tasty local beer is widely available and consumers have more choices than ever before. But further deregulation will foster additional competition and ensure that future generations of beer lovers will never again be limited to MillCoorWeiser at their Oktoberfest celebrations or backyard BBQs.
Sep 07, 2016

This train (wreck) of fiscal events raises a question: Will Paul Krugman and other “progressives” who routinely ridicule as foolish all claims that cuts in marginal tax rates aren’t necessarily fiscally irresponsible now be equally dismissive of claims that increases in marginal tax rates are necessarily fiscally responsible?
Sep 07, 2016

In other words, not only have [Certificate-of-Need] laws failed in their goal of reducing health care spending, they have backfired and driven spending upward.
Sep 01, 2016

Relying more heavily on market forces and federalism will get us more bang for our transportation buck. While controversial, privatization—together with more local control—will benefit taxpayers and drivers by reducing congestion, improving the quality of our roads, and lowering overall costs.
Aug 28, 2016

Good “economic DNA” doesn’t make years of profligate spending, evasive accounting, increasing tax burdens and regulatory pressure go away, as businesses and residents can flee for better climates. But it gives states an opportunity to right the ship.
Aug 24, 2016

But if local politicians don’t deserve all of the blame, they shouldn’t be exonerated either. Local government policies play an important role in the success or failure of a local economy and thus local politicians, regardless of party or intensions, deserve some of the blame when cities struggle.


When state governments favor in-state businesses over more affordable out-of-state businesses, taxpayers are forced to pay more for government projects. So-called “preference policies” give politicians a politically valuable opportunity to buy goods from, and support employment for, a narrow set of producers within their state, but these policies increase the cost of government. This increase in the cost of government requires extra dollars from taxpayers, taking resources that could be put toward other uses.


Matthew Mitchell is a Senior Research Fellow and Director of the Project for the Study of American Capitalism at the Mercatus Center at George Mason University.
Eileen Norcross is a senior research fellow and director for the State and Local Policy Project at the Mercatus Center at George Mason University.


Eileen Norcross | September 06, 2016
Eileen Norcross talks to host Larry Rifkin about Connecticut’s Fiscal Rankings.

Recent Events

The Mercatus Center invites you to join Research Fellow Christopher Koopman for a presentation examining the economics and policy issues surrounding the sharing economy.


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

Adam Millsap | Jun 15, 2016
Adam Millsap discussed local economies with Wallethub's Richie Bernardo for their piece "2016’s Metro Areas That Most and Least Resemble the U.S."
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.
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