IGS Journal Examines Western State Finances

Ethan Rarick
July 30, 2015

State governments across the West are generally doing better financially than during the Great Recession, but fiscal details vary from state to state throughout the diverse region, according to a new special issue of the Institute’s California Journal of Politics and Policy.

The journal issue, which includes papers analyzing the recent budgets of 10 Western states, depicts a region enjoying a slow but steady recovery from the sharp economic downturn of a few years ago. State governments, in turn, have generally seen revenues increase, allowing for a mix of increased spending, tax cuts, or larger state savings.

Each year IGS produces a special issue of CJPP addressing state government finance throughout the West. The papers are produced by scholars in each western state, working in conjunction with the Center for Public Policy and Administration at the University of Utah.

The resulting “Western States Budget Report” addresses a core IGS research interest – state government and public finance – and provides scholars and other researchers with an annual summary of regional conditions.

The papers in the new issue largely address the budgets for fiscal year 2013-14, although in states with biennial budgeting the timeframe for the papers is longer. Later this year IGS will publish a special issue of CJPP analyzing state budgets for the 2014-15 fiscal year.

The current papers mainly portray a region in which public finance is on the rebound.

In New Mexico, for example, the Legislature and governor authorized phased-in corporate income tax cuts, small public-employee raises, and general-fund reserves of 10-12 percent, according to a paper by Professor Kim Seckler of New Mexico State University.

“New Mexico appears to be experiencing moderate, but solid economic growth, perhaps signifying it is past the worst effects of the economic recession,” Seckler wrote, describing conditions that also existed in other western states. “The multiple special sessions and budget-cutting days of the 2009, 2010 and 2011 legislatures are fading into the history books.”

There were few signs of long budget delays that afflicted some states during the Great Recession. In California, for example, the 2013-14 budget was enacted on time, and provided for a spending increase for all state funds of approximately $3 billion over the previous year, to approximately $145 billion, according to the analysis by professors Brian DiSarro and Wesley Hussey of Sacramento State University. 

At the same time, the papers reflect the wide variety of state government finances throughout the west, including several states with unusual fiscal situations. In Alaska, for example, roughly 90 percent of the state’s General Fund comes from the oil industry, and lower oil prices and production created tighter finances there, noted a paper by professors Jerry McBeath of the University of Alaska, Fairbanks, and Glenn Wright of the University of Alaska, Southeast. Hawaii and Nevada also have unusual financial structures, relying heavily on tourism revenue and gambling taxes, respectively.

Ethan Rarick is the Associate Director of IGS and the Director of the Matsui Center.