State Budgets

Key Points
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Key Points
  • Tax and Expenditure Limitations, like Colorado’s Taxpayer Bill of Rights, have been shown to stabilize budgets over time.
  • Taxpayers deserve to know how their dollars are being spent. All levels of government should establish user-friendly websites, allowing citizens to search through a robust database of all financial transactions.
  • Governments should budget for outcomes, identifying core functions and measuring results.
  • In 2003, Washington State used outcome-based budgeting to close a $2.4 billion deficit without raising taxes.

SBS LogoSmart budgeting is vital to a state’s financial health. The ALEC State Budget Reform Toolkit offers more than 20 policy ideas for addressing today’s shortfalls in a forthright manner, without resorting to budget gimmicks or damaging tax increases.

One way to stabilize budgets over time is to embrace Tax and Expenditure Limitations (TELs). The most effective TELs, like Colorado’s Taxpayer Bill of Rights (TABOR), require voter approval to raise taxes, issue debt or spend surplus revenue. Policy reforms like TABOR give hardworking taxpayers more protection and ensure that state budget growth is stabilized at a reasonable level.

Restoring accountability to government spending is another way to mend state budgets over the long run. Since ALEC first adopted its model Taxpayer Transparency Act in 2007, nearly every state has launched a budget transparency website, allowing citizens to more easily find out how their tax dollars are spent. All levels of government, including school districts and municipalities, would do well to follow suit.

More fundamentally, government should budget for outcomes. This means identifying the core functions of state government and measuring results. In 2003, Washington State used outcome-based budgeting to close a $2.4 billion deficit without raising taxes.

Articles

State Budgets

Jonathan Williams and Skip Estes: Income Tax Would Not Save Florida

Jonathan Williams/April 23, 2020
State Budgets

Jonathan Williams and Lee Schalk: States Should Not Seek Federal Bailout

State Budgets

Tax and Fiscal Policy Task Force and Center for State Fiscal Reform: Policy Prescriptions to Address Economic and Health Care Challenges in the Face of COVID-19

+ All State Budgets Articles

Publications

  • COVER IMAGE – 2019 Unaccountable and Unnaffordable – FINAL

    Unaccountable and Unaffordable 2019

    Unfunded state pension liabilities total $4.9 trillion or $15,080 for every man, woman and child in the United States. State …
    Jonathan Williams/June 4, 2020
  • Bonded Obs 2019 Cover

    State Bonded Obligations, 2019

    States issue a diverse array of bonded obligations, with a range of obligation strength, revenue sources, debt service schedules and …
    Jonathan Williams/February 11, 2020
  • OPEB 2019 Cover

    Other Post-Employment Benefit Liabilities, 2019

    The Continuing Need for OPEB Reform
    Jonathan Williams/January 23, 2020
  • UAUA 19

    Unaccountable and Unaffordable 2018

    Unfunded liabilities in public pension plans continue to loom over state governments nationwide. If net pension assets are determined using …
    Jonathan Williams/March 20, 2019
  • 2018 RSPS 11th Cove_Web_SM

    Rich States, Poor States, 11th edition

    The 11th Edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index reveals a pro-growth trend across the nation for 2018.
    Jonathan Williams/January 31, 2019
  • Bonded Obligations Cover

    State Bonded Obligations, 2018

    States issue a diverse array of bonded obligations, with a range of obligation strength, revenue sources, debt service schedules, and …
    Thurston Powers/August 28, 2018
+ All State Budgets Publications

Model Policies

  • Property Tax Appraisal Reform Act Draft

    SECTION 1 Amends [INSERT STATE] Tax Code, as follows: If the appraised value of property in a tax year is lowered upon taxpayer appeal, the appraised value of the property as finally determined under that determination is considered to be the appraised value of the property for that tax …

  • Truth in Taxation Act Draft

    As used in this section: (1) “Taxing subdivision” means any political subdivision of the state that levies an ad valorem tax on property. (2) “Revenue neutral rate” means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous …

  • Draft Act to Identify Coercive Federal Funds in the Budget of [INSERT STATE] Sunset Review

    An Act to create [section ______] of the statutes; relating to: [state legislative budget bureau] reports on federal funds in the state budget, and the conditions attached by federal law and federal regulation thereto, including related guidance. The people of the state of [state_____], represented in senate and assembly, do enact as follows: Section [_____] …

  • State Constitutional Amendment for a Balanced Budget Final

    BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF {insert state}: Section 1. The following amendment to the Constitution of the State of {insert state} is proposed and agreed to by this, the {insert name of state legislature}, and is referred to the next Legislature for reconsideration and agreement.

Task Forces

Tax and Fiscal Policy

The ALEC Tax and Fiscal Policy Task Force is dedicated to researching and promoting sound policy aimed at creating a …

Press Releases

+ All State Budgets Press Releases