Paper on State Fiscal Cliffs is Greeted as a Wake-up Call
In April 2022, the Volcker Alliance released The $195 Billion Challenge: Facing State Fiscal Cliffs After COVID-19 Aid Expires in partnership with Beverley S. Bunch. The issue paper is the latest in a series of Alliance reports on state and local budgeting in the era of COVID-19 and has garnered significant coverage across news platforms.
At least three of the eleven most populous US states may face significant spending challenges after federal pandemic aid under the American Rescue Plan Act of 2021 (ARPA) expires by the end of 2026. Fiscal cliffs, or sudden and severe economic decline, may loom if states use their budgetary relief funds for ongoing expenditures, such as long-term policy initiatives, instead of one-time costs, like infrastructure projects. Preliminary filings on relief fund allocations required by the US Treasury Department are inconsistent and lack transparency, limiting the ability of decision-makers, researchers, and the public to evaluate implications of $195 billion in federal pandemic economic recovery cash provided to states under ARPA.
The $195 Billion Challenge issue paper earned coverage in both national media outlets, such as Politico Morning Money and Center Square, and significant local media coverage in states found to be at a high risk of ‘fiscal cliffs.’ Media coverage also revealed that multiple state elected officials considered the findings of the paper, as many issued formal responses to the paper. In one case, Stacy Garrity, Pennsylvania’s treasurer, stated that the report “confirms what I and others have been saying for a long time: Pennsylvania will face a fiscal cliff in the coming years, and using one-time revenues for recurring expenses is not the way to go.”
Since publication, the issue paper has been featured in Route Fifty, The Sacramento Bee, WBRE, and Santa Barbara News-Press, among other news sources. Select media coverage also featured interviews and conversations with William Glasgall and the paper’s author, Beverly S. Bunch. One such discussion was on the air in Los Angeles’s KNX News 97.1 FM’s In Depth, where Glasgall discusses the findings of the report in the context of record-breaking revenues many states, including California, are experiencing. Another appearance included WHTM ABC 27 in Harrisburg, where Bunch and Glasgall spelled out what the findings of the issue paper mean for Pennsylvania and the state’s fiscal future.