State Budgets Under Stress

As the federal government seeks broad funding cutbacks on health, housing, and the environment — all areas in which it has played a major role over the last 60 years — states are struggling to compensate. Budgets are already strained, with most states facing falling revenues and projected deficits. And in contrast to the federal government, nearly all states are required to issue balanced budgets. Without federal support in these key areas, states may be forced to make up the difference through increasing taxes or deprioritizing other functions. This will likely lead to difficult decisions for local governments, and the fallout could extend to transportation, public safety, education, and other critical community functions. Planners may be called upon to help local leaders evaluate the impacts of federal funding losses on municipal budgets and plan to mitigate those challenges — and they may wish to similarly evaluate the impact of federal funding on their own positions.