Balanced Budget Requirements:

State Experiences and Implications for the Federal Government

AFMD-93-58BR: Published: Mar 26, 1993. Publicly Released: Mar 26, 1993.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO provided information on: (1) states' balanced budget requirements; (2) states' experience in meeting those requirements; and (3) implications for a federal balanced budget.

GAO found that: (1) 48 states have balanced budget requirements; (2) states focus primarily on balancing the general fund, which includes general tax receipts and discretionary appropriations; (3) states do not have provisions for automatic spending cuts or other formula-based processes to implement their requirements; (4) many states give governors the authority to enforce balanced budget requirements throughout the fiscal year by unilaterally reducing state spending; (5) state tax and fee increases and spending cuts outweighed budget-balancing measures to use cash reserves and defer current year payments until the following year; (6) although most balanced budget requirements are not explicit regarding year-end balances, 39 states had balanced budgets every year since 1990; (7) factors motivating balanced budget actions include the expectation of balanced budgets and the concern that state bond ratings may decrease if the state does not balance its budget; and (8) the federal budget's unique macroeconomic role could be compromised by a strict balanced budget mandate.

Jul 21, 2016

Jun 23, 2016

May 12, 2016

Apr 14, 2016

Mar 4, 2016

Oct 30, 2015

Sep 9, 2015

Aug 17, 2015

Jul 9, 2015

Apr 27, 2015

Looking for more? Browse all our products here