David Schleicher on the Fiscal Whipsaw in State Governments
Very Serious with Josh Barro
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Introduction
Josh Barrow: The federal government has run large budget deficits for the last few years, but the picture in the states has been quite different. He says incomes and tax revenues held up much better than expected, and the federal government gave generous aid to states' localities that combine to produce huge budget surpluses in every state. But now that's turning again; taxes are slowing because so many states cut taxes in the pandemic,. public employees are demanding raises, often not unreasonably given how tight the labor market is.
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