Rockefeller Institute Expert Testifies Before Congress on States’ Fiscal Condition

Institute Deputy Director Robert Ward urges “broader thinking and analysis” about relationship between Washington and states

Albany, N.Y. — At the request of a subcommittee of the House Judiciary Committee, the Rockefeller Institute presented testimony today at a Washington hearing into state finances and the effects of federal legislation on state and local government revenues.

Institute Deputy Director Robert Ward outlined recent trends in, and the outlook for, state and local finances. As Institute reports have detailed, states have suffered from tax revenue declines for longer than any other time on record. Ward told members of the Subcommittee on Commercial and Administrative Law that state leaders “now face budget choices that are more difficult than any since the Great Depression.”

Ward also pointed to major developments in the federal-state fiscal relationship such as the recently enacted national health-care legislation. He suggested “broader thinking and analysis” about the potential for major restructuring of fiscal relationships between Washington and the states.

“Thoughtful observers are starting to talk about significant restructuring of governmental finance at both the national and subnational levels,” Ward told members of Congress. “Whether one’s favored solutions involve more revenue sources such as a value-added tax, or new restraints on health care and other spending – or a combination of both approaches – the complex array of fiscal relationships between Washington and the states will be an important subtext of any serious debate, as it should be because states implement many of the most important policies the federal government adopts.

“Debate there will be,” he continued. “The question is how we may best inform it.”

For a full copy of the testimony, visit www.rockinst.org.