Managing Fiscal Risks

A growing list of long-term budgetary challenges is making it increasingly difficult for states to plan for the future and address uncertain financial pressures.

The Pew Charitable Trusts helps state policymakers prepare for new and emerging risks to fiscal stability and manage uncertainty by strengthening budgeting practices across several areas, including:

  • Understanding and improving natural disaster budgeting practices.
  • Identifying and planning for other emerging risks such as significant demographic, technological, and economic shifts.
  • Improving state management of federal funds to account for uncertain and volatile funding.

Recent Work

Federal Grants to States Keep Federal Share of Budgets High

The share of states’ total revenue coming from federal funds remained elevated in fiscal year 2022, fueled by pandemic aid dollars and infrastructure investments. Total federal grants to states topped $1 trillion for the first time, but amid soaring state tax collections, their share of state budgets declined slightly from a record high in fiscal 2021.

How States Can Build Disaster-Ready Budgets

Policymakers at every level of government are grappling with the rising costs of storms, floods, wildfires, and other natural disasters and how best to aid affected communities. As disasters have grown in frequency and severity, so too has the strain on public finances and the urgency to update budgeting practices, especially in the states, to help public officials plan for changing spending needs.

Pandemic Aid: States Safeguarded Against Budget Challenges

The American Rescue Plan Act (ARPA) passed by Congress in 2021 provided a historic influx of federal funding to help the nation respond to the dual economic and public health crises that accompanied the COVID-19 pandemic.

Wildfires: Burning Through State Budgets

Wildfires in the United States have become more catastrophic and expensive in recent years, with the U.S. Department of the Interior and the U.S. Forest Service nearly doubling their combined spending on wildfire management in the last decade. Wildfire management consists of preparing for, fighting, recovering from, and reducing the risk of fires. To execute these activities, states, localities, the federal government, and Tribes, as well as nongovernment entities such as nonprofit organizations and private property owners, participate in a complex system of responsibilities and funding dictated by land ownership and an interconnected set of cooperative agreements.

Pandemic Aid Lifts Federal Share of State Budgets to New Highs

The share of states’ total revenue that comes from federal funds climbed to a record high nationally and in most states in fiscal year 2021, the first full budget year bolstered by temporary COVID-19 pandemic aid from the federal government.

Media Contact

Catherine An

Senior Officer, Communications

202.552.2088