Every year, or every other year, states face the challenge of creating budgets that adequately address the needs of their residents while also keeping in mind their short and long-term fiscal health. Different rules and institutions have developed over time as states faced changing economic and fiscal conditions and dealt with competing interests.
What are these rules, and do they help states meet the needs of their residents while preparing for the future?
To help sort through the web of state budget processes, we’ve highlighted chapters from our comprehensive review of state budget practices. Each section reviews current budgeting practices across the states and evaluates evidence from the literature on the efficacy of specific measures.
Components of a State Budget
What do states spend money on, and how do they pay for services?
State Budgets and Revenue Volatility
How do states deal with unexpected fluctuations in state revenue?
Budget Influencers
How do the three branches of state government, as well outside actors such as the electorate, unions, federal, local, and neighboring governments, help mold the budget?
Evidence on Sustainable State Budgeting Practices
What does the research from academics and policy analysts say about the fiscal and economic impact of popular state budget practices? Below, learn about:
- Budgeting Timelines, Baselines and Forecasting, including the Budget Cycle, Revenue Forecasting, and Budgeting Baselines.
- Budget Requirements and Restrictions, including Balanced Budget Requirements, Budget Stabilization Funds, Debt Limits, the Line Item Veto, Supermajority Budget Rules, and Tax and Expenditure Limits
- Budget Transparency Measures, like Pension Accounting and Tax Expenditure Reporting
Recommendations
Based on findings from the research, how can policymakers and researchers create better budgeting practices? We recommend that states:
GOT A MINUTE?
If you need to brush up on state budget basics, our fact sheets will quickly get you up to speed.
