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What a Tricky Economic Cycle Means for State Budgets: Jonathan Williams in Governing

There needs to be a real, grownup discussion around needs versus wants.

Jonathan Williams, ALEC Executive Vice President of Policy and Chief Economist, was quoted in a Governing piece discussing the critical decisions lawmakers have to make when managing their states’ budgets.

“For two or three years, states were able to have their cake and eat it, too — cutting taxes, increasing spending and putting money away in rainy-day funds. That moment has now passed, but it doesn’t mean states are sinking into a deep hole, suggests Jonathan Williams. Lawmakers are certainly cognizant that the good times are not going to last forever,” he says. “While it feels relatively like an austere budget scenario, given the gusher of federal funds in recent years, states are still sitting on robust rainy-day funds.”

Williams is concerned, however, about budget proposals that rely on familiar bad habits to avoid dealing with tough choices, such as skipping pension fund payments. But he says there’s at least one “very positive outcome” from the current flattening of revenues: “There needs to be a real, grownup discussion around needs versus wants.”

Read the full article here.