Publius: The Journal of Federalism Advance Access originally published online on June 15, 2009
Publius: The Journal of Federalism 2009 39(3):455-475; doi:10.1093/publius/pjp014
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This article appears in the following Publius: The Journal of Federalism issue: The State of American Federalism 2008–2009 [View the issue table of contents]
State and Local Finance: Increasing Focus on Fiscal Sustainability
*Rockefeller Institute of Government, State University of New York, wardr{at}rockinst.org
Rockefeller Institute of Government, State University of New York, dadayanl{at}rockinst.org
Researchers in state and local finance have placed increasing focus in recent years on "fiscal sustainability," the ability of governments to meet existing spending commitments with existing resources. The Governmental Accounting Standards Board (GASB), which establishes accounting and financial reporting standards for states and local governments, is considering setting standards in this area. This article analyzes recent history of states’ expenditures and revenues as context for potential trends. It examines descriptions of fiscal sustainability that have been offered in previous literature and suggests a need for clear definition. The article discusses potential implications of action by GASB in this area, as well as developments in the economy and potential action at the federal level that may influence state and local budgets in the years ahead.