Peer-Reviewed Research
Conventional wisdom suggests budget maneuvers threaten long-term structural balance because they transfer resources from the future to the present by non-transparent means. Budget maneuvers remain poorly understood in part because they are more difficult to observe than traditional tax and expenditure changes to remedy budget deficits. In this research, a taxonomy of budget maneuvers influenced by the recent work of the Volcker Alliance and other public budgeting scholars is used to create an original tally of maneuvers used by U.S. state governments during the Great Recession. Ten states implemented more than half of documented budget maneuver use during that era, while incidence of maneuver use for the remaining 40 states is largely limited to transfers of balances from cash funds. This supports NASBO's contention that maneuvers are not a primary budget-balancing instrument for most states. This research then presents the postrecession trajectories of four states that relied heavily on maneuvers—California, Connecticut, Illinois, and Wisconsin. While California and Wisconsin largely curtailed the use of budget maneuvers after the Great Recession, Connecticut and Illinois continued to implement them as they remained mired in subsequent budget crises.
Use taxes are utilized by states to discourage taxpayers from engaging in sales tax avoidance via shopping in lower tax states. Enforcement of this tax has long been difficult, as demonstrated in the case of South Dakota v. Wayfair, Inc. (2018). States have instead relied on different administration and tax structures to generate revenues. We contribute to the limited existing use tax literature by studying a panel of use tax revenues collected from 25 states, as well as use tax collection methods states implement for individual and business taxpayers. States are best at enforcing the use tax where they can rely on complementary administrative tax collection systems, such as in business-to-business transactions. They will likely struggle to realize improved use tax compliance for household consumption even in the wake of the Wayfair ruling.