States' Use of Sustainable Budgeting Tools

Long-term assessments and stress tests help policymakers make better budget choices

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States' Use of Sustainable Budgeting Tools

Editor’s note: Since the publication of this research, Pew has learned that Colorado produced a budget stress test in November 2022, and this page is in the process of being updated to reflect that information.

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Source: Pew analysis of state documents and information provided by state officials

When state leaders have data and analysis that illuminate their states’ long-term risks and outlooks, they are better able to ensure that their budgets stay on a sustainable path. As part of its 2023 report “Tools for Sustainable State Budgeting,” The Pew Charitable Trusts produced fact sheets on each state that, since the start of 2018, has published one or both of two tools that provide the information policymakers need:

  • Long-term budget assessments analyze multiyear revenue and spending projections to show whether and why states may face chronic deficits.
  • Budget stress tests gauge states’ preparedness for temporary shortfalls that would result from future economic downturns.

These fact sheets describe the strengths of each state’s analyses, ways in which those analyses have informed policymakers’ decisions, and opportunities to improve.

Alaska Arizona California Colorado
Connecticut Florida Illinois Maine
Maryland Minnesota Montana Nebraska
New Mexico New York North Carolina Pennsylvania
Rhode Island Tennessee Utah West Virginia
What is Budget Stress Testing?
What is Budget Stress Testing?
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States Should Measure Budget Risks

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Responsible state fiscal policy requires more than just balancing the current year’s budget. It must also include ensuring that the budget is on a sustainable path. Otherwise, policymakers cannot have the lasting impact they hope for: They may act to improve state services or cut taxes only to have to scale those efforts back later. This risk is especially high in the aftermath of the COVID-19 pandemic.

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Getty Images
Report

Tools for Sustainable State Budgeting

Quick View
Report

Responsible state fiscal policy requires more than just balancing the current year’s budget. It must also include ensuring that the budget is on a sustainable path. Otherwise, policymakers cannot have the lasting impact they hope for: They may act to improve state services or cut taxes only to have to scale those efforts back later. This risk is especially high in the aftermath of the COVID-19 pandemic. Record budget surpluses, driven largely by federal pandemic aid, empowered states to adopt historically large tax cuts and spending increases from 2021 to 2023, investments that many state leaders hope to build on in coming years.