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American states face a revenue crisis

Published by The Economist on Fri, 06 Apr 2018


The budget's underwater tooPOLITICIANS love to talk about spending. To simplify, Democrats win leftist votes by calling it investment and promising more of it. Republicans secure conservative votes by calling it waste and pledging to make cuts. Talking candidly about how to collect the revenues that fund government is more ticklish, especially when the pain is likely to be broadly shared.This may help to explain why a surprising number of American states are facing a revenue crisis, even as the broader economy enters its ninth year of recovery. With unemployment at a 17-year low and stockmarkets near all-time highs, one might expect state coffers to be overflowing. Yet many states find themselves struggling to collect enough revenue to balance their budgets'as most are legally obliged to do. According to the National Association of State Budget Officers, 27 states saw their revenues fall below expectations last year. While states have been grappling with...Continue reading
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