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Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.

By law are states required to have balanced budgets?

By Eric Smith
YES

States lack the financial flexibility available to the federal government, which can issue its own debt and plan on deficit spending year after year. As of 2015, 46 states and the District of Columbia had some kind of formal balanced-budget requirement preventing them from planning on deficits. In the others, rules limited their ability to run a deficit.

When tax receipts fall because of an economic slowdown, states must move to raise taxes or cut spending, temporarily bridging the gap with reserves or borrowing from outside sources. States (and other local jurisdictions) can also issue bonds to fund planned investment-type projects like roads or bridges. They typically must seek voter approval to do so.

This fact brief is responsive to conversations such as this one.
ABOUT THE CONTRIBUTOR
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
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