Steve Malanga takes an alarming look at various state budgets and the imprudent behavior of state officials. Some concrete ideas for reform:
One is for states to switch from yearly budgets to balanced multiyear plans, so that legislators won’t be able to employ tricks one year and ignore their consequences the next. Another is for states to tighten restrictions on borrowing to include debt issued by quasi-governmental entities and authorities. States can also increase the amount of money that their reserve accounts must hold during good economic times, which would both restrain the growth of government during the good times and provide a cushion against severe revenue falloffs in recessions.