State Budgets
Key Points
- Tax and Expenditure Limitations, like Colorado’s Taxpayer Bill of Rights, have been shown to stabilize budgets over time.
- Taxpayers deserve to know how their dollars are being spent. All levels of government should establish user-friendly websites, allowing citizens to search through a robust database of all financial transactions.
- Governments should budget for outcomes, identifying core functions and measuring results.
- In 2003, Washington State used outcome-based budgeting to close a $2.4 billion deficit without raising taxes.
Smart budgeting is vital to a state’s financial health. The ALEC State Budget Reform Toolkit offers more than 20 policy ideas for addressing today’s shortfalls in a forthright manner, without resorting to budget gimmicks or damaging tax increases.
One way to stabilize budgets over time is to embrace Tax and Expenditure Limitations (TELs). The most effective TELs, like Colorado’s Taxpayer Bill of Rights (TABOR), require voter approval to raise taxes, issue debt or spend surplus revenue. Policy reforms like TABOR give hardworking taxpayers more protection and ensure that state budget growth is stabilized at a reasonable level.
Restoring accountability to government spending is another way to mend state budgets over the long run. Since ALEC first adopted its model Taxpayer Transparency Act in 2007, nearly every state has launched a budget transparency website, allowing citizens to more easily find out how their tax dollars are spent. All levels of government, including school districts and municipalities, would do well to follow suit.
More fundamentally, government should budget for outcomes. This means identifying the core functions of state government and measuring results. In 2003, Washington State used outcome-based budgeting to close a $2.4 billion deficit without raising taxes.
Model Policies
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Federal Funds Oversight Act Final
(1) State agency federal funding requirements. (a) Prior to accepting federal funding, the state budget office and the agency which will be charged with accepting the federal funding shall provide a report to the governor, state legislature, auditor general, state treasurer and the Independent Fiscal Office (or relevant…
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Resolution Urging Congress to Protect Consumer Privacy in Banking and Financial Transactions Final
Resolution Urging Congress to Protect Consumer Privacy in Banking and Financial Transactions WHEREAS, the Biden Administration and some in Congress have proposed changes to tax information reporting which would require financial institutions to provide the Internal Revenue Service reports of incoming and outgoing transactions from every customer financial…
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Statement of Principles on ARPA Aid to State Governments Final
Statement of Principles Temporary Funds Require Temporary Spending History reveals that federal spending and bailouts are not a “free lunch” for states. Academic research shows that federal aid to the states increases both state spending and overall tax burdens. If state leaders spend temporary federal funds, the increased spending should…
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Statement of Principles on Sound Rainy Day Fund Practices Final
Guiding Principles of State Rainy Day Funds The American Legislative Exchange Council (ALEC) is committed to developing state budgetary policies that foster an economy that works for all, empowering people to earn success and realize their potential. One way that a legislature can ensure this goal is by preparing for…
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Resolution in Support of End-of-Year Fiscal Responsibility Final
WHEREAS: Waste, fraud, and abuse occur frequently in agency budget processes WHEREAS: Congress has the responsibility to ensure agency waste, fraud, and abuse is minimized and taxpayers are protected from agency mismanagement WHEREAS: In the last quarter of the fiscal year (Q4), federal agencies spent 25.4% more than previous months…
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Resolution in Opposition to Federal Bailouts of State Budgets Final
WHEREAS, the national debt surpassed $27 trillion in October 2020; WHEREAS, states – like the federal government – have demonstrated a lack of spending restraint, with state and local government direct general expenditures increasing by nearly 90% over the past 40 years when accounting for inflation and population growth; WHEREAS,…
Press Releases
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ALEC Releases 23 New Model Policies from 50th Annual Meeting
Arlington, Va. – The American Legislative Exchange Council (ALEC) is proud to announce the release of 23 new model policies on vital issues facing the American public,…
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New 50-State Rankings Showcase Economic Policies Attracting Individuals and Job Creators
ARLINGTON, Va. – Today, the American Legislative Exchange Council (ALEC) released the 16th edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, the annual report assessing each…
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New Report Reveals Growing State Bonded Debt Burdens
FOR IMMEDIATE RELEASE Contact: Alexis Jarrett ajarrett@alec.org New Report Reveals Growing State Bonded Debt Burdens Total state bonded obligations have grown by…
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New Report: Most States Failing to Address Underfunded Health Benefits for Retired Public Employees
FOR IMMEDIATE RELEASE Contact: Alexis Jarrett Email: ajarrett@alec.org New Report: Most States Failing to Address Underfunded Health Benefits for Retired Public Employees Unfunded…
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New 2021 State Economic Competitiveness Rankings Reveal the Success Formula for Prosperity After COVID-19
FOR IMMEDIATE RELEASE Contact: Alexis Jarrett Email: ajarrett@alec.org New 2021 State Economic Competitiveness Rankings Reveal the Success Formula for Prosperity After COVID-19 Utah…
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Unfunded Liabilities in State Pension Plans Total Nearly $5 Trillion, Threatening Taxpayers Nationwide
FOR IMMEDIATE RELEASE Contact: Alexis Jarrett ajarrett@alec.org Unfunded Liabilities in State Pension Plans Total Nearly $5 Trillion, Threatening Taxpayers Nationwide Public…
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The States Applaud the New Presidential Budget Proposal
FOR IMMEDIATE RELEASE Contact: Dan Reynolds Email: dreynolds@alec.org The States Applaud the New Presidential Budget Proposal ARLINGTON, VA – (FEBRUARY 10, 2020) Today, President Donald Trump released his…
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Unfunded Health Care Benefits for Retired Public Employees Leave States and Taxpayers at Risk
FOR IMMEDIATE RELEASE Contact: Dan Reynolds, ALEC Public Affairs Email: dreynolds@alec.org Phone: 571-782-5038 Unfunded Health Care Benefits for Retired Public Employees Leave States and Taxpayers…
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ALEC Scholar Dr. Arthur Laffer Receives Presidential Medal of Freedom
FOR IMMEDIATE RELEASE Contact: Daniel Reynolds dreynolds@alec.org ALEC Scholar Dr. Arthur Laffer Receives Presidential Medal of Freedom Sound economics recognized by the President…
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Rich States Attract More Residents, Poor States Make Them Leave
Contact: Dan Reynolds dreynolds@alec.org Rich States Attract Residents, Poor States Make Them Leave ARLINGTON, VA – (April 15, 2019) The American Legislative Exchange Council (ALEC) releases today, Rich States,…
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2018 State Economic Competitiveness Rankings Reveal Upward Standings tied to Federal Tax Reform
FOR IMMEDIATE RELEASE Contact: Anna Tarnawski atarnawski@alec.org 973-879-2273 Arlington, VA (April 17, 2018) — The American Legislative Exchange Council (ALEC) today released the much anticipated…
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New Report Analyzes Governors’ Economic Policy Proposals
FOR IMMEDIATE RELEASE Contact: Taylor McCarty tmccarty@alec.org 734-752-5646 New Report Analyzes Governors’ Economic Policy Proposals State of the State addresses reveal free market…
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Annual Report Highlights Nine States That Cut Taxes in 2016
For Immediate Release Contact: Taylor McCarty tmccarty@alec.org 202-309-1274 Arlington, VA (March 1, 2017)—Nine states substantially cut taxes in the 2016 legislative session, according to a…