Fiscal Disparities Across the U.S. States

States and their local governments vary both in their needs to provide basic public services, and in their abilities to raise revenues to pay for those services. This study uses the Representative Revenue System (RRS) and the Representative Expenditure System (RES) frameworks to quantify these disparities across states by comparing each state's revenue capacity, revenue effort, and necessary expenditures to the average capacity, effort, and need in states across the country.

Key Concepts

• Revenue capacity is the total revenue that a state (and its localities) would have raised if it were to apply a uniform set of taxes and charges 'representative' of policies prevailing across the 50 states.
• Revenue effort is the ratio of actual revenues to revenue capacity.
• Expenditure need is a measure of the cost of providing public services at an average level given the state's characteristics.
• Expenditure effort is the ratio of actual expenditures to expenditure need.
• Fiscal capacity is the ratio of revenue capacity to expenditure need.

Read More

Click the links below for more information and findings from the study.

• Tax Fact Column
• Tax Policy Issues and Options Brief
• Complete Research Report

Supplementary Datasets

• Representative Revenue System 2002 Dataset
• Representative Expenditure System 2002 Dataset
• Fiscal Capacity 2002 Index Measures

Want to know more about a state?
Click on a state or state name below to view individual state pages.

Alabama Hawaii Massachusetts New Mexico South Dakota Alaska Idaho Michigan New York Tennessee Arizona Illinois Minnesota North Carolina Texas Arkansas Indiana Mississippi North Dakota Utah California Iowa Missouri Ohio Vermont Colorado Kansas Montana Oklahoma Virginia Connecticut Kentucky Nebraska Oregon Washington Delaware Louisiana Nevada Pennsylvania West Virginia Florida Maine New Hampshire Rhode Island Wisconsin Georgia Maryland New Jersey South Carolina Wyoming