State and Local Policy Project

State and Local Policy Project

Many states face crushing budget deficits, rising unemployment, and other economic and social ills. The State and Local Policy Project conducts research into the institutional drivers of state and local fiscal challenges to suggest potential solutions.  The project focuses on the relationship between the states and the federal government, interest group dynamics, and the incentives behind budget and spending issues to put forward ideas for sustainable budget reform. 

Research

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.
Justin M. Ross | Jun 23, 2015
An important concern to the efficiency of public finance systems is that voters suffer from various “fiscal illusions” that can politicians can exploit to expand the public sector. This paper contributes evidence of this effect on a public finance system through the revenue elasticity hypothesis, which is a form of fiscal illusion in which voters confuse tax rates with tax burdens in the approval of public spending. The applied empirical setting is Virginia cities and counties from 2001 to 2011, where the timing of mass property reappraisals is exogenous but known to local policymakers in setting the annual budget.
Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | Jun 09, 2015
Thirty-six states and the District of Columbia currently limit entry or expansion of health care facilities through certificate-of-need (CON) programs. These programs prohibit health care providers from entering new markets or making changes to their existing capacity without first gaining the approval of state regulators. Since 1975, Arkansas has been among the states that restrict the supply of health care in this way, with six devices and services—including nursing home beds and long term care beds, psychiatric services, and assisted living and residential care facilities—requiring a certificate of need from the state before the device may be purchased or the service offered.
Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | Jun 02, 2015
Since 1977, West Virginia has been among the states that restrict the supply of health care in this way, with 21 devices and services—including acute hospital beds, magnetic resonance imaging (MRI) and positron emission tomography (PET) scanners—requiring a certificate of need from the state before the device may be purchased or the service offered.
Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | May 26, 2015
Thirty-six states and the District of Columbia currently limit entry or expansion of health care facilities through certificate-of-need (CON) programs. These programs prohibit health care providers from entering new markets or making changes to their existing capacity without first gaining the approval of state regulators. Since 1972, Kentucky has been among the states that restrict the supply of health care in this way, with 18 devices and services—including acute hospital beds, magnetic resonance imaging (MRI) and positron emission tomography (PET) scanners—requiring a certificate of need from the state before the device may be purchased or the service offered.
Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | May 19, 2015
Thirty-six states and the District of Columbia currently limit entry or expansion of health care facilities through certificate-of-need (CON) programs. These programs prohibit health care providers from entering new markets or making changes to their existing capacity without first gaining the approval of state regulators. Since 1972, Michigan has been among the states that restrict the supply of health care in this way, with 18 devices and services—including acute hospital beds, magnetic resonance imaging (MRI) and positron emission tomography (PET) scanners—requiring a certificate of need from the state before the device may be purchased or the service offered.

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.
Veronique de Rugy | Jun 02, 2015
Contrary to what you will hear from its supporters and beneficiaries, the Ex-Im Bank plays a marginal role in export financing—backing a mere 2 percent of US exports each year. The vast majority of exporters secure financing from a wide variety of private banks and other financial institutions without government interference or assistance. With US exports hitting record high levels, it is obvious that such financing is abundant and government assistance is superfluous.
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.
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.

Speeches & Presentations

Contact

Daniel M. Rothschild

Program Websites

Neighborhood Effects


Neighborhood Effects is a blog about American state and local economic policy and political economy issues, focusing on a variety of issues related to federalism, tax and budget, public sector spending, infrastructure, urban life, and economic policy.


Inside State & Local Policy


Inside State and Local Policy is a podcast hosted by the Mercatus Center at George Mason University focused on economics at the state and local level of government. This podcast is a resource for state policy makers, the media, and others with an interest in state issues and innovative solutions to the issues facing all states. Each brief episode features conversations with policy scholars, elected officials and other practitioners. Our goal is to bridge the gap between policy theory and policy making and provide state policy makers with scholarly analysis on the potential outcomes of legislative and regulatory reforms. This podcast is hosted by the Mercatus Center’s Director of Economic Education, James C. Musser.


Charts

Christopher Koopman, Thomas Stratmann, Mohamad Elbarasse | May 13, 2015
The existence of a CON program is detrimental to the welfare of the residents of the state, regardless of the number of restrictions. Even for states with only a few restrictions, Stratmann and Russ find that the presence of a CON program in a state is associated with fewer hospital beds, Computed Tomography (CT) scanners, and MRI machines.

Experts

Videos

Eileen Norcross | April 15, 2015
Pennsylvania’s state pension fund is in dire straits. Eileen Norcross testified on opportunities for pension fund reform before the State Senate Finance Committee…

Podcasts

Eileen Norcross | April 09, 2015
With all the talk about pension reform in Pennsylvania, Eileen Norcross discusses whether existing guidelines are enforced this with Keystone Crossroads.

Recent Events

Matthew Mitchell, Maurice P. McTigue, John Garen | February 10, 2012
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.

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.
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