State and Local

State and Local


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.
Eileen Norcross | Jul 07, 2015
In new research for the Mercatus Center at George Mason University, Senior Research Fellow Eileen Norcross ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, including unfunded pensions and health care benefits. The study, which builds on previous Mercatus research about state fiscal conditions, provides information from the states’ audited financial reports in an easily accessible format, presenting an accurate snapshot of each state’s fiscal health.
Robert Krol | Jun 24, 2015
In a new study for the Mercatus Center at George Mason University, economist Robert Krol demonstrates that governments are more likely to set up barriers to new technology when the performance advantage of the new technology is small or incremental and lobbying costs are low. Incumbent businesses threatened by a new technology may use the government to block businesses using the new technology from entering the market. Ultimately, government protection of incumbent businesses reduces consumer well-being.

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

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.
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.
Aug 10, 2015

There are economically worthwhile transportation infrastructure projects that need funding, but given the limited tax funds available, it makes sense to target the funds to get the biggest bang for the buck. Since the completion of the Interstate Highway System in the 1980s, politicians in Washington have failed to do this. It's time to shift responsibility for the provision of transportation infrastructure back to cities and states.
Jul 23, 2015

Michigan has struggled to emerge from the Great Recession, just like so much of the rest of the nation — and it still has a great deal of work to do. The latest evidence is a new report published by the Mercatus Center at George Mason University, which shows the state’s “fiscal health” ranking is slipping.
Jul 23, 2015

If there’s a lesson to draw from the financial disasters in Greece, Puerto Rico and Chicago, it’s this: When governments take on too much debt and continually defer their bills, it eventually spells trouble — for both taxpayers and those who rely on government pensions or services.


Increasingly, states are deeply divided on central questions of national politics and policy. The divide is often viewed as a lamentable and perhaps dangerous form of political “polarization.” But those fears are exaggerated. In fact, the divide between and among the states offers an opportunity to reform federalism on a constitutional basis.


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.


Robert Graboyes | September 10, 2015
Dr. Robert Graboyes discusses the future of health care and how regulating historic models can impede innovative, game changing health solutions.

Upcoming Events

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

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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