August 2015 | Brookings
For the first time since the Great Recession of the late 2000s, the fiscal position of the states is looking bright. The economy is growing more rapidly than anytime over the last decade, causing state revenues to rebound, and many states will see additional revenues as a result of last year’s federal tax overhaul.
But if there is one thing I’ve learned as an economist who led the National Governors Association for decades, it’s that budgeting in good economic times can be much more difficult than in bad times. The competition for any surplus revenues is always going to be intense. Meanwhile, however, most economic forecasters are warning that the next recession could be far worse than the one that decimated state budgets a decade ago. That’s why it’s critical to seize this opportunity and invest the current surpluses in education and workforce talent. Otherwise, we will spend years struggling to recover from the next economic downturn.Read More