View Research by Author - Therese J. McGuire

Publications

This article summarizes a March 2007 TPC-Northwestern conference examining state and local finances. Reprinted from Lincoln Institute of Land Policy Land Lines October 2007 issue.

Twenty-eight states have some state spending or revenue limit in place. In November 1992, Colorado voters passed the most restrictive measure yet, the Taxpayer Bill of Rights (TABOR), the economic effects of which have been hotly debated in recent years. The authors examine the history of TABOR and find that there is little evidence that TABOR significantly boosted Colorado's economy.

Seemingly every day the media chronicles the dire fiscal straights facing virtually every state government. For many states, the deficits they face are unprecedented in size and persistence. And yet it seems we have been here before. At least once a decade in the past 30 or so years, the economy has taken a downturn, and state revenues have failed to keep pace with state expenditures. Despite the creation of "rainy day funds" in most states, policymakers continue to be caught unprepared each time the economy falters.

This paper examines state revenues, expenditures, and economic cycles over a recent 18-year period. The authors ask what will happen to state welfare spending when the next recession occurs. The history of state revenues and expenditure during recessionary periods indicates that most states will raise taxes in order to maintain spending. Whether states will increase taxes to maintain welfare payments is unclear.

Return to list of authors