Office, "The Budget and Economic Outlook: Fiscal
Notes
Years 2008 to 2018," January 2008, p. 52.
1. Thanks to Rachel Peters and Harrison Moar
12. National Association of State Budget Officers,
for their outstanding help on this report. I also
"The Fiscal Survey of States," June 2008, pp. 57.
appreciate the research performed by Elizabeth
Karasmeighan.
13. Federal Reserve Board, "Flow of Funds Accounts
of the United States," June 5, 2008, Table D.3.
2. U.S. Bureau of the Census, "Quarterly Summary
of State Tax Revenue Data," www.census.gov/govs
14. Moody's Investors Service, "2008 State Debt
/www/qtax.html. These data are for calendar years.
Medians," April 2008.
The figure for 2008 is estimated based on first
quarter data.
15. Chris Edwards, "State and Local Government
Debt Is Soaring," Cato Institute Tax and Budget
3. National Association of State Budget Officers,
Bulletin no. 37, July 2006.
"The Fiscal Survey of States," June 2008, and prior
issues. Spending rose from $508 billion in fiscal
16. The lower figure is from the Pew Center on the
2003 to an estimated $686 billion in fiscal 2008.
States, "Promises with a Price: Public Sector
Retirement Benefits," 2007. The higher figure is
4. One concern regards the much weaker tax lim-
from Barclays Global Investors, and assumes that
its on business property than on residential prop-
government plans used similar accounting meth-
erty, which makes it likely that local governments
ods as private plans.
will increase taxes to a greater extent on business
property going forward. For background on
17. David Cho, "Growing Deficits Threaten Pen-
changes to Florida's property taxes, see www.flori
sions," Washington Post, May 11, 2008, p. A1.
dataxwatch.org.
18. David Cho, "Growing Deficits Threaten Pen-
5. Chris Edwards and Daniel Mitchell, Global Tax
sions," Washington Post, May 11, 2008, p. A1.
Revolution: The Rise of Tax Competition and the Battle
19. Chris Edwards and Jagadeesh Gokhale, "Un-
to Defend It (Washington: Cato Institute, 2008).
funded State and Local Health Costs: $1.4 Tril-
6. Recent articles on the state budget situation
lion," Cato Institute Tax and Budget Bulletin no.
include Keith Richburg and Ashley Surdin, "States
40, October 2006.
Are Hit Hard by Economic Downturn," Washington
20. Pew Center on the States, "Promises with a
Post, March 31, 2008, p. A1; Jennifer Steinhauer, "As
Price: Public Sector Retirement Benefits," 2007.
the Economy Falters, So Do State Budgets," New
York Times, March 17, 2008; and Conor Dougherty,
21. Pew Center on the States, "Promises with a
Amy Merrick, and Anton Troianovski, "States
Price: Public Sector Retirement Benefits," 2007.
Slammed by Tax Shortfalls," Wall Street Journal, July
24, 2008.
22. NASBO data is available in annual editions of
their "The Fiscal Survey of States."
7. U.S. Bureau of the Census, "Quarterly Summary
of State Tax Revenue Data," www.census.gov/govs/
23. NCSL data on enacted state tax changes is avail-
www/qtax.html.
able in National Conference of State Legislatures,
"State Tax Actions 2007," May 2008, and prior
8. Estimated based on Census data for the first
annual editions. State Tax Notes is published by Tax
quarter of 2008.
Analysts, Falls Church, Virginia. See www.tax.org.
9. These data are based on NASBO spending totals
24. See www.taxfoundation.org/taxdata. Tax rate
as presented in Figure 1. They differ a bit from data
data was supplemented with data from the
in National Association of State Budget Officers,
Federation of Tax Administrators at www.taxad-
"The Fiscal Survey of States," June 2008, Table 2.
min.org.
10. National Association of State Budget Officers,
25. This variable was a challenge to measure. The
"The Fiscal Survey of States," June 2008.
starting points were NASBO reports showing
proposed tax changes and NCSL reports showing
11. Medicaid spending represented 22 percent of
tax changes that were actually enacted. However,
total state spending in fiscal 2006. See National
the NCSL and NASBO reports have many short-
Association of State Budget Officers, "State
comings and omissions. Thus, a detailed file of
Expenditure Report 2006," December 2007, p. 2. For
news articles from State Tax Notes was compiled to
Medicaid projections, see Congressional Budget
27