Economic Data Can Be Used To Target State Fiscal Relief Effectively

Publication Date: March 2008

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Elizabeth McNichol; Jason Levitis; Iris J. Lav

Research Area: Banking and finance; Government

Keywords: Economic projections; Fiscal future; State budgets; Recession

Type: Report


States are experiencing major budget problems; more than half are projecting deficits for the coming fiscal year.  To meet their balanced budget requirements, states will have to raise taxes and/or cut expenditures for services such as health care and education — actions that will deepen the nation’s economic problems and offset some of the effect of the recently enacted federal stimulus package by removing demand from the economy.  To date, however, federal policymakers have shown some reluctance to enact federal fiscal relief that would lessen the need for states to take such actions.