States vary in how much governments collect in revenue and spend on goods and services. To understand the sources of these differences, we examined what states could raise (revenue capacity) and would spend (expenditure need) if they followed national averages, taking into account their own...
State governments often use their tax system to partner with the private sector on economic development initiatives. A key part of their economic development strategy, states use tax incentives as one tool of economic development to compete with other states and globally for investment, jobs,...
Access to financing is critical to businesses small and large looking to start new ventures, expand existing ones, or relocate facilities. When cost-effective financing is unavailable for worthy projects, state governments can and do step in to help. Governments use their power and their...
How should governments use the considerable revenue carbon taxes can raise? There are many options for cutting other taxes, increasing spending, or reducing borrowing. We organize the options into four goals: offset the new burdens that a carbon tax places on consumers, producers, communities,...
Corrective taxes can encourage healthier, safer, and less polluting behavior. But how should governments use their revenue? Options abound to cut other taxes, boost spending, or reduce borrowing. We organize those uses into four categories: offsetting new burdens, furthering the same goal,...
The effects of state tax policy on economic growth, entrepreneurship, and employment remain controversial. Using a framework that in prior research generated significant, negative, and robust effects of taxes on growth, we find that neither tax revenues nor top income tax rates bear stable...
This information brief looks at new rules the Governmental Accounting Standards Board (GASB) has issued requiring state and local governments to disclose certain tax abatements in the annual financial report. This new requirement will make information about tax abatements at the state and local...
This brief looks at the Workforce Innovation and Opportunity Act of 2014 (WIOA) and its emphasis on coordination between economic development and workforce development programs. In fact, one WIOA’s main purposes is to better align workforce and economic development systems, more tightly...
Changing demographics, technology, and inflation are creating an increasingly difficult environment for state budgets. An aging population puts more pressure on spending programs while reducing tax revenues from some sources. State sales tax revenue systems have not kept up as technology has...
Cuts in top state income taxes are intended to raise economic growth, but could instead force punishing spending cuts, as revenues fall and states confront borrowing constraints. Previous work shows no clear impact of state taxes on growth. In new research, we build on a widely cited study that...
Assessing Fiscal Capacities of States: A Representative Revenue System–Representative Expenditure System Approach, Fiscal Year 2012
States vary in how much governments collect in revenue and spend on goods and services. To understand the sources of these differences, we examined what states could raise (revenue capacity) and would spend (expenditure need) if they followed national averages, taking into account their own...
State Tax Incentives for Economic Development
State governments often use their tax system to partner with the private sector on economic development initiatives. A key part of their economic development strategy, states use tax incentives as one tool of economic development to compete with other states and globally for investment, jobs,...
State Financing Incentives for Economic Development
Access to financing is critical to businesses small and large looking to start new ventures, expand existing ones, or relocate facilities. When cost-effective financing is unavailable for worthy projects, state governments can and do step in to help. Governments use their power and their...
How to Use Carbon Tax Revenues
How should governments use the considerable revenue carbon taxes can raise? There are many options for cutting other taxes, increasing spending, or reducing borrowing. We organize the options into four goals: offset the new burdens that a carbon tax places on consumers, producers, communities,...
How Should Governments Use Revenue from Corrective Taxes?
Corrective taxes can encourage healthier, safer, and less polluting behavior. But how should governments use their revenue? Options abound to cut other taxes, boost spending, or reduce borrowing. We organize those uses into four categories: offsetting new burdens, furthering the same goal,...
The Relationship Between Taxes and Growth at the State Level: New Evidence
The effects of state tax policy on economic growth, entrepreneurship, and employment remain controversial. Using a framework that in prior research generated significant, negative, and robust effects of taxes on growth, we find that neither tax revenues nor top income tax rates bear stable...
GASB 77: Reporting Rules on Tax Abatements
This information brief looks at new rules the Governmental Accounting Standards Board (GASB) has issued requiring state and local governments to disclose certain tax abatements in the annual financial report. This new requirement will make information about tax abatements at the state and local...
Coordinating Workforce and Economic Development under WIOA
This brief looks at the Workforce Innovation and Opportunity Act of 2014 (WIOA) and its emphasis on coordination between economic development and workforce development programs. In fact, one WIOA’s main purposes is to better align workforce and economic development systems, more tightly...
Governing with Tight Budgets
Changing demographics, technology, and inflation are creating an increasingly difficult environment for state budgets. An aging population puts more pressure on spending programs while reducing tax revenues from some sources. State sales tax revenue systems have not kept up as technology has...
The Growth Mirage: State Tax Cuts Do Not Automatically Lead to Economic Growth
Cuts in top state income taxes are intended to raise economic growth, but could instead force punishing spending cuts, as revenues fall and states confront borrowing constraints. Previous work shows no clear impact of state taxes on growth. In new research, we build on a widely cited study that...