State Savings Prop Up Spending After 2001 Recession
Publication Date: May 2007
Publisher(s): Tax Policy Center
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Tax Policy; State and Local Issues; Taxes, the Budget, and the Economy; Budget Issues
The states experienced rapid and dramatic nominal revenue declines following the 2001 recession, but spending did not follow suit. The chart in this article shows general fund revenues and spending from 2000 to 2006 (not adjusted for inflation) and savings as a percent of prior-year expenditures. Spending over the 2001-2003 period was essentially flat in the face of lower revenues, and a drop in savings made up some of the shortfall.