State Governments as Victims

by | Jan 31, 2017

State Governments as Victims

by | Jan 31, 2017

This was a news headline in the Wall Street Journal yesterday: “States’ Revenue Shortfalls Exacerbate Budget Crunch.” The article said that, “Faced with weak revenue, sluggish growth and possible federal funding cuts, many governors and state lawmakers face a tough budget season.”

That made me laugh. “States as victims” is a common storyline in the mainstream media anytime that state budgets are not growing gangbusters. States need to balance their general fund budgets each year, and so it is true that state policymakers must be more responsible that the spend-and-borrow politicians in Washington. But news stories on the states rarely provide the important context of how much budgets have grown over time.

The chart below—based on NASBO data—shows general fund revenues since fiscal 2010, with projected revenues for fiscal 2017. To achieve annual balance, the “tough” task of state policymakers is simply to keep spending rising no faster than these revenues.

Does the chart look like a “crunch” to you with “weak” revenue? And if 33 percent revenue growth over seven years and 3.6 percent projected growth in 2017 creates a “shortfall,” what do you think the problem is?

 Reprinted from the Cato Institute’s Cato at Liberty.

Our Books

Shop books published by the Libertarian Institute.

libetarian institute longsleeve shirt

Our Books

cb0cb1ef 3fcb 417d 80d8 4eef7bbd8290

Recent Articles

Recent

TGIF: The US Empire’s 72-Year War on Iran

TGIF: The US Empire’s 72-Year War on Iran

The likely temporary Israel-Iran ceasefire notwithstanding, if you need proof of how despicable Donald Trump is, consider this: When asked last week if he would ask Israeli Prime Minister Netanyahu to stop bombing Iran, which had already said it would stop retaliating...

read more
Want More Families? End Inflation

Want More Families? End Inflation

In the recently published Inflation and the Family, Jason Degner delivers a compelling, accessible, and deeply necessary work—one that lays bare the real, grinding consequences of inflationary policies on everyday American families. For those concerned with economic...

read more

Pin It on Pinterest

Share This