Journal Article

The state of state and local government finance

Abstract: This paper provides an overview of the state-local government sector, a review of the short-run impact of the 2007-09 recession on state and local governments, and a brief summary of key long-run challenges state and local governments will encounter in the next decade. State and local governments in aggregate represent about one-seventh of the U.S. economy, with education and welfare (mostly Medicaid) accounting for more than half. These governments currently face nearly unprecedented fiscal turmoil as a result of the recent recession. Even after the economy recovers, states and localities will face challenges both to improve effectiveness and efficiency in public service provision and to generate revenue sufficient to fund these crucial public services.

Keywords: state finances; Fiscal policy; Municipal finance;

Status: Published in Proceedings of a conference co-hosted by the Federal Reserve Bank of St. Louis and the Weidenbaum Center at Washington University in St. Louis on the current status of state and local public finance, fiscal federalism in the United States, an economic evaluation of state and local taxes, and non-traditional revenue sources for state and local governments, April 9, 2010.

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Regional Economic Development

Publication Date: 2010

Issue: Oct

Pages: 4-22