Gimmicks, Fiscal Evasion and Fiscal Illusion in State Budgets

Most states know they have big problems and that today’s budget gaps were created over a long period by policy and budgeting choices.

In my latest Mercatus Center Working Paper “Fiscal Evasion in State Budgeting” I discuss how states got into this situation, in part, by (legally) concealing and avoiding the full costs of policies. Some of these tactics, such as deferring pension payments, have gotten alot of attention. And others are harder to tease out.

For example, see this video at the Yankee Institute for Public Policy on how Connecticut used state university tuition to balance its budget.