Federal Assistance to States During Economic Downturns

Understanding state and local government revenue and expenditure patterns can help policymakers determine whether, when, where and how they provide federal fiscal assistance to state and local governments in response to future national recessions. In general, state and local governments' revenues increase during economic expansions and decline during national recessions. State and local revenue declines have varied during each recession, and the declines have been more severe during recent recessions. Additionally, revenue fluctuations vary substantially across states, due in part to states' differing tax structures, economic conditions, and industrial bases. This book examines the responsiveness of federal assistance to states during economic downturns and how the knowledge of past recessions can inform future assistance.