Long-term trends in state finances.

• Position: News & Numbers - Brief article

The growth in traditional sources of state revenue is slowing down, while expenditure growth is poised to accelerate, creating increasingly difficult annual budget challenges as states attempt to satisfy balanced-budget requirements, according to Governing with Tight Budgets: Long-Term Trends in State Finances, a recent paper from the Urban Institute. The paper examines the history and outlook of state revenues and expenditures, particularly the effects of the last recession on state fiscal policy

The tenuous balance between revenues and outlays in state finances is becoming more precarious, according to the paper. The growth in the traditional sources of state revenue is slowing down while expenditure growth is poised to accelerate. As a result, states will be facing...