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. 


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.
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


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.


Marc Joffe | Oct 28, 2015
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.



Eileen Norcross | August 20, 2015
Eileen Norcross testifies on PCN-TV to discuss Pennsylvania's public sector pensions.


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

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.


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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