{
  "title": "Great Recession and Fiscal Squeeze at U.S. Subnational Government Level",
  "publication": "IMF Working Papers, July 1, 2012",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/index.md",
  "summary": "The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States. It documents the sharp decline in tax revenue and discusses how states responded to close the budget gaps in order to obey the balanced budget provisions.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States.\n- It documents the sharp decline in tax revenue and examines how states responded to close budget gaps in order to obey balanced budget provisions.\n- The paper highlights the procyclical nature of these policy responses.\n- It provides a brief comparison with subnational policy stances in other advanced economies.\n- It discusses options for making subnational fiscal policy less procyclical within the framework of current rules."
    },
    {
      "heading": "Key findings and observations",
      "content": "- Sharp decline in tax revenue during the Great Recession of 2007-08 affected U.S. state and local governments.\n- States implemented measures to close budget gaps to comply with balanced budget provisions.\n- The policy responses at the subnational level were procyclical, amplifying fiscal contractions during the downturn.\n- A brief cross-country comparison indicates different subnational policy stances in other advanced economies (details and country-by-country specifics are addressed in the paper)."
    },
    {
      "heading": "Options to reduce procyclicality (discussed)",
      "content": "- The paper discusses several options for making subnational fiscal policy less procyclical while operating within existing rules. (The paper outlines mechanisms and institutional options; consult the full paper for detailed proposals.)"
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Budget planning and preparation; Expenditure; Financial crises; Global financial crisis of 2008-2009; Public financial management (PFM); Revenue administration; Subnational tax; Tax collection; Taxes\n- Keywords: bond yield; budget gap; Budget planning and preparation; country; Fiscal policy; Global financial crisis of 2008-2009; government; government supplier; job statistic; local government; local government employment; local government finance; net government lending; property tax; State budget; state government; State nominal; State tax collection; Subnational tax; Tax collection; tax policy; tax receipt; WP\n\n---\n\n Content in this bundle\n\n- Wp12184\n  - Wp12184 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp12184 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/bundle-manifest.json)",
    "Authors: Jiri Jonas",
    "Published: July 1, 2012",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475505320.001",
    "The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States.",
    "It documents the sharp decline in tax revenue and examines how states responded to close budget gaps in order to obey balanced budget provisions.",
    "The paper highlights the procyclical nature of these policy responses.",
    "It provides a brief comparison with subnational policy stances in other advanced economies.",
    "It discusses options for making subnational fiscal policy less procyclical within the framework of current rules.",
    "Sharp decline in tax revenue during the Great Recession of 2007-08 affected U.S. state and local governments.",
    "States implemented measures to close budget gaps to comply with balanced budget provisions.",
    "The policy responses at the subnational level were procyclical, amplifying fiscal contractions during the downturn.",
    "A brief cross-country comparison indicates different subnational policy stances in other advanced economies (details and country-by-country specifics are addressed in the paper).",
    "The paper discusses several options for making subnational fiscal policy less procyclical while operating within existing rules. (The paper outlines mechanisms and institutional options; consult the full paper for detailed proposals.)",
    "Subject: Budget planning and preparation; Expenditure; Financial crises; Global financial crisis of 2008-2009; Public financial management (PFM); Revenue administration; Subnational tax; Tax collection; Taxes",
    "Keywords: bond yield; budget gap; Budget planning and preparation; country; Fiscal policy; Global financial crisis of 2008-2009; government; government supplier; job statistic; local government; local government employment; local government finance; net government lending; property tax; State budget; state government; State nominal; State tax collection; Subnational tax; Tax collection; tax policy; tax receipt; WP",
    "**Wp12184**"
  ],
  "related": [
    {
      "title": "Wp12184",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12184.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12184.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12184.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/great-recession-and-fiscal-squeeze-at-u-s-26060/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T15:13:57.359Z"
}