Developing State Budgets in Tough Fiscal Times

Posted October 21, 2009, By the Annie E. Casey Foundation

In hard times, state policymakers must make tough choices to balance state budgets while protecting public well-being. The following principles, drawn from, a website managed by the Center for the Study of Social Policy with Casey support, offer guidance for making the best decisions for children and families.

1. Protect the most vulnerable

Recessions sharply increase unemployment, homelessness, and hunger. Funding benefits and services for people who need them most not only minimizes human suffering; it also reduces future costs to the state.

2. Focus on results

Focusing on measurable results can help set priorities and guide decisions about the best use of scarce resources.

3. Maximize return on investment—over the short and long term.

Especially when money is tight, it pays to invest in cost-effective services, programs, and policies that provide immediate benefits for children and families and that keep paying as children grow into productive adults.

4. Stimulate the economy by investing in children and families

Providing financial support to struggling families who will immediately spend it on necessities both quickly injects money into the economy and benefits those most likely to be hurt by the economic downturn.

5. Strengthen community resources

In times of hardship, many people turn to extended families, neighbors, faith groups, local food banks, and other community resources. By investing in local assets, policymakers can strengthen neighborhoods, spur local innovation and problem-solving, and tap the capacity of communities to prevent the need for more extensive assistance.

6. Seize the opportunity for reform

When budgets are tight, it’s easier to develop political consensus to eliminate well-intentioned but ineffective programs that don’t help vulnerable children and families. Tough times provide impetus for changing the way decisions are made and for building the capacity to make effective financing, budgeting, and policy choices.

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