The State Budget Crisis Task Force, a PGPF grantee, released its final report today, examining fiscal conditions at the state level, particularly in the aftermath of the global financial crisis. The group convened leaders across multiple industries and areas of expertise, looking at subjects including underfunded pension promises, transportation investment, the state/federal Medicaid partnership, and the impact of federal deficit reduction.
The final report concludes that "without deep-seated reform in state government fiscal affairs or federal recognition of the strains on state and local budgets, the future health of America’s communities and its economy are at great risk of future deterioration." The report includes recommendations for the future including in the following areas: modified accrual budgeting by states and localities; multiyear financial plans; reserve funds; borrowed funds never treated as revenue; strengthened state oversight; budget standards; easily understandable financial reports; implications for the federal government; projections of the impact of federal actions; and adequate disclosure of municipal finance risks.
Task Force co-chairs Paul Volcker and Richard Ravitch released the final report at an event in Washington, DC this morning. Download the full report here. For more information about the State Budget Crisis Task Force, click here.