The 13 essays in this volume focus on constraining state and local fiscal policy. The authors tend to have some connection to George Mason University, the American Legislative Exchange Council, or the Cato Institute. Although the contributions as a whole possess strong doctrinal conformity, this is leavened with historical context and case studies to present a somewhat broader view of state and local public finance. The first part of the collection is devoted to state debt and fiscal stability. State liabilities, including responsibility for infrastructure, pensions, and accumulating debt, are evaluated in the context of defaults during the 19th and 20th centuries. Rainy day funds and debt brakes are suggested to improve stability. The second section, dealing with fiscal institutions, contends with public-private business ventures as well as budgeting and stability issues. Zero-based regulation is recommended, keeping with efforts to attain zero-based budgeting. The final section critiques fiscal federalism, deprecating federal aid to state and local governments for a variety of reasons. A preferable fiscal federalism, one contributor suggests, would be to reverse revenue sharing, reminiscent of 18th-century federal funding under the Articles of Confederation. Recommended. Graduate students.

Choice Reviews

The analyses in this volume are applicable to all levels of government, especially for difficult conceptual issues, e.g. recognition of unfunded liabilities, right-sizing budget stabilization funds, regulatory budgeting, asset/liability valuation, and design of the essential budget constraint.

Marvin Phaup, George Mason University

The arrival of New Perspectives on State Government Fiscal Challenges, an anthology edited by Barry Poulson and John Merrifield, couldn't be more timely. Expenditures by state and local governments have exploded since 1980, growing at a 6.2% annual rate, nearly double the annual rate of inflation over that period. The anthology insightfully covers the good, the bad, and the ugly. It offers creative prescriptions for states to avoid allowing their finances to spin out of control. This book is a welcome addition to a neglected subject: state and local public finance.

Steve H. Hanke, The Johns Hopkins University

This volume offers a rich menu of food for thought for anyone who works on or studies state budgets and federalism, especially for legislators and those who advise them. It provides a sober assessment of states' fiscal health, a review of institutions that support sound policy, useful comparisons between the states, and recommendations for doing better. The diverse topics shine light into many important factors shaping state fiscal policy.

Kurt Couchman, Americans for Prosperity