The Myth of State Balanced Budgets

The Myth of State Balanced Budgets

One of the great charades of American public finance is that "states must balance their budgets." ... Total state government debt is about $4.17 trillion...

Forty-nine states have statutory or constitutional balanced budget requirements. But those good government limitations only cover operating budgets. And operating budgets are somehow only 60 percent of total state spending...

The Pew Center on the States has done great work on the state pension issue. Pew found that 34 states significantly underfunded pension plans by $1.38 trillion...

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... There may be good reasons to incur debt to pay for some state government projects. We should at least be honest about it.

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View David Brunori's opinion in its entirety on the taxanalysts® Blog.

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