Facing Fiscal Risks: How State Budgets will be Impacted by Emerging Trends”.

Public budgeting, which involves providing services based on revenues derived from economic activity, is likely to face challenges from various emerging trends. An analysis focusing on state budgets is likely to have similar considerations for county fiscal leaders as well. The Pew Trusts, in its project on “Managing Fiscal Risks,” outlines a series of ways that state budgets and other public spending plans will face new challenges in the future.

Crafting a state budget is always a delicate balancing act, even in the best of times. Policymakers must estimate spending needs, predict revenue trends, and prioritize numerous urgent needs while maintaining a balanced budget. These demands can make it challenging for fiscal leaders to look beyond the immediate budget cycle and consider how major shifts in the status quo could impact their states’ fiscal future. With significant demographic, environmental, and technological changes on the horizon, states need to find ways to anticipate and address the potential fiscal impact of these emerging risks.

In a recent article on the Pew website, author Peter Muller discusses the anticipated revenue effects of an aging population, climate-related spending needs, and cybersecurity concerns. It is crucial for states to plan ahead and manage these future budget challenges to ensure fiscal stability in the face of evolving risks. For more information about these challenges and how states can prepare for them, you can read Muller’s full article on the Pew website.