How states raise and spend money lays the foundation for economic growth and the provision of essential public services. Long-term fiscal sustainability helps ensure that needs are met during times of prosperity and uncertainty. While state budgets remain strong, pressures such as demographic changes, natural disasters, new technologies and aging infrastructure make it increasingly difficult to maintain stability.
States use a variety of tools, mechanisms and procedures to develop sustainable budgets and account for potential threats. Access to accurate and timely data is an indispensable decision-making component. In an era of excess information, finding and analyzing reliable data indicators from disparate sources can be challenging and time- consuming. Policymakers might find themselves inundated with information and analyses from innumerous sources.
For more than a decade, Fiscal 50 by The Pew Charitable Trusts has served as a guide for state leaders to better understand their state’s fiscal health. Fiscal 50 is an interactive platform providing comprehensive insights on trends that impact the long-term financial well-being of states. Through its user-friendly interface, Fiscal 50 equips policymakers with accurate and timely information from reliable sources. Now, the revamped Fiscal 50 includes new features, indicators and visuals that empower users to navigate budget complexities.
New Features To Inform Decisions
The Budget Threads section of Fiscal 50 includes the latest fiscal and economic analyses by experts at Pew in a centralized platform. In addition to the latest reports, Fiscal 50 contains eight valuable indicators that enable users to have a greater understanding of their state’s long-term fiscal health. State Pages allow the user to view the budget indicators of a specific state, while the "Indicators” tab provides a 50-state analysis of a specific budget trend. The eight key indicators include:
- Fiscal Balance: This indicator shows the difference between a state’s total revenue and expenses over the past 15 years. While states can usually ride out a short-term deficit, long-term fiscal balance trends indicate how sustainable a state’s fiscal path is.
- Tax Revenue Trends: Compares a state’s recent tax collections to its own 15-year trend level. The 15-year analysis allows policymakers to better understand, for example, whether recent tax revenue changes are due to temporary factors or long-term trends.
- Federal Share of State Revenue: The pandemic spurred an increase in the share of states budgets made up by federal funds. On average, 36.7% of state revenue came from federal funding streams in fiscal year 2021. Alaska, Louisiana and Montana saw some of the highest percentages of state revenue from federal funds.
- Reserves and Balances: States store surplus revenue in rainy day funds to use during unexpected periods of deficits. This indicator highlights how many days each state could operate solely on rainy day funds in contrast to the 50-state median.
- Long-Term Liabilities: Shows how much your state accumulated in three regularly reported long-term obligations, and how prepared it is to cover the costs of pension and retiree health care benefits and outstanding debt. If not accounted for, these liabilities pose threats to fiscal health.
- State Medicaid Spending: Medicaid is one of the largest state expenses and it is expected to rise going forward. This indicator allows users to compare the amount a state currently spends on Medicaid to how much they have spent on average in the last 15 years.
- Tax Revenue Volatility: Provides a state volatility score assessing how much your state’s growth rate varies year-to-year. On average, tax volatility has increased, due largely to personal income, sales, and corporate income revenues.
- Population Change: Demographic shifts can have major implications on state budgets. Changes in the population size and age affect how much revenue states collect and spend on services. With this indicator, you can compare the pace of your state’s population growth to others and understand the reasons behind it and explore projections for coming years.
The use of data in state fiscal policy is not just helpful but essential for informed decision-making. With new budgetary challenges on the horizon, policymakers need reliable tools to address societal needs effectively. Fiscal 50 consolidates accurate and up-to-date budget information in an interactive platform, laying the groundwork for long-term fiscal stability.