Budget Battle Book

States’ fiscal gimmicks

The state budget mess is even worse than it looks. In June the National Association of State Budget Officers warned that states would soon be forced to “realign spending plans with fiscal reality.” A July report from the State Budget Crisis Task Force suggests many state legislators are unwilling to do so. 

The task force, an independent group of state budget experts convened in 2011 to study fiscal challenges in California, Illinois, New Jersey, New York, Texas, and Virginia, noted that the flagging economy has taken a toll. But it also warned that even if the economy recovered, state budgets might not follow suit.

That’s because state budget books don’t always accurately reflect reality. According to the task force’s report, states relied on many “nonrecurring resources and gimmicks, such as shifts in the timing of revenues and expenditures and borrowing to fund current spending, many of which were in use before the recession.” 

Texas, for example, improved its current budget picture by delaying $2 billion in payments by a single month—enough to move the payments from one fiscal period to the next. Virginia underfunded its pension system. New York paid income tax refunds late. 

Budget gimmicks were not the only worry. The task force also noted that rising Medicaid spending, shrinking tax bases, and local governments’ fiscal stress constituted “major fiscal threats.”  

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • tipuasher||

    I just want to express gratitude you for your ability to talk concerning topics that I in fact do not care about, and creation me ponder concerning them for the rest of the day. fantastic editorial with of use contents.


Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties